The research house, which has an "outperform" recommendation on the stock, said the charter of FPSO Abigail-Joseph is expected to commence by end-October 2020, whereby the company will recognise an accounting treatment of a one-off sale revenue of the FPSO.
This will be similar to the sale revenue recognised in 4QFY20 from the commencement of the FPSO Helang.
Kenanga also said the adoption of the finanice lease accounting treatment for the company's newer FPSOs will lead to further mismatch between the company's reported profit and cash flows.
"However, despite the accounting treatment, these should have a minimal impact towards the valuations of the projects," it said.
The research house raised its FY21 and FY22 earnings assumption by 25% and 24% to account for higher recognition of EPCIC profits.
"We still like Yinson for its resilient delivery of earnings and growth potential, and being a defensive play against the current oil industry downturn.
"Within our SoP, the Parque das Baleias FPSO remains as the only contract that is still yet to
be awarded (contributes ~RM1.60/share in our SoP), and thus would naturally pose as the highest risk of facing deferment/termination," it said.
It added that other secured contracts at hand in the order-book carry relatively low risk of
Kenanga maintained its sum-of-parts target price of RM7.10 on the counter.
For the first half of its financial year, Yinson posted core net profit of RM234.7mil, which made up 60% and 64% of Kenanga's and consensus full-year estimates respectively.
"The better-than-expected earnings were due to the recognition of engineering, procurement, construction, installation and commissioning (EPCIC) profits arising from the construction of the FPSO Anna Nery which started during the quarter, as a result of finance lease accounting treatment for the contract.
"Nonetheless, announced interim dividend of 4.0 sen per share (same as 1HFY20) is deemed well within expectations," it added.
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