KUALA LUMPUR: Kenanga Research has maintained an outperform call on Yinson Holdings Bhd
with a sum of parts-driven target price of RM4.50 by imputing another contract win in FY20.
"Yesterday, Yinson announced that PTSC Ca Rong Do Ltd, a 49%-51% JV jointly owned by Yinson and PetroVietnam Technical Services Corporation (PTSC) has
received a notice that PTSC was notified by Talisman Vietnam 07/03 B.V. (TLV) of a force majeure event where TLV has been directed not to carry out the scheduled work program for the CRD Project for the time being."
The research firm said this is negative to Yinson as the joint venture is likely to face contract termination. However, management has guided that in the worse-case scenario, all costs are recoverable.
According to Kenanga Research, Yinson has also entered into an interim contract with PTSC to charter FPSO PTSC Lam Son with effect from 1 July 2017.
This is largely to facilitate the charter payment for services provided since July last year until a new charter contract is established within the next six months.
In term of outlook, Kenanga Research said it understands that the FPSO outlook is improving as Yinson is currently bidding for multiple projects in countries such as Nigeria, Brazil and Ghana.
"Thus, we believe Yinson is preparing to secure another big project (c.USD1b capex) post completion of sale of 26% stake in FPSO JAK."
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