KUALA LUMPUR: Maybank IB Research is upbeat on Yinson Holdings Bhd
on steady earnings growth and visible tender pipeline prospects. It upgrades its FY18-20 earnings forecast by 28% to 42%, DPS by 5x to 10 sen per annum and target price to RM4.45, which represents a 28% upside.
"Core net profit of MYR111m (+58% QoQ; +77% YoY) in 2QFY18 took 1HFY18 core earnings to MYR181m (+76% YoY), representing 69% of our previous FY estimate. The QoQ strength was fuelled by its FPSO JAK operations (2-month impact), amid major cost savings on below-budgeted capex and early asset delivery.
"We estimate FPSO JAK alone accounted for 40% (MYR44m) of Group’s 2QFY18 earnings, 47% above our e.MYR30m. Meanwhile, an interim DPS of 4 sen for FY18 (ex-date: 28 Nov) is another positive surprise, bringing YTD DPS to 6sen," it said.
THe research firm's earnings forecasts have yet to include FPSO Lam Son's contribution from July 2017 until it get a LOA.
"There are 2-3 firm tenders that Yinson is targeting on. Winning any of these could lead to further earnings and NPV upside potential. Valuations are inexpensive vis-à-vis its earnings growth/dividends prospects."
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