PETALING JAYA: Yinson Holdings Bhd
’s near-term earnings is supported by long-term contracted cash flows from its existing floating production, storage, and offloading (FPSO) fleet, says CIMB Research.
However, it cautioned that the softer contract award environment may temper medium-term growth opportunities should delays persist particularly in terms of order book replenishment.
It added that this may defer balance sheet re-deployment, and moderate earnings growth beyond financial year 2028 (FY28).
According to CIMB Research, Yinson told analysts recently that the pace of new FPSO tender awards has been slower than expected, with only four FPSO contracts awarded year-to-date, well below market expectations of eight to 10 FPSO awards per year.
The slower award momentum reflects extended project sanction timelines, prolonged front-end engineering and design processes, and disciplined capital expenditure allocation by operators, which collectively weigh on near-term growth visibility across the sector.
The research house raised its FY26 earnings forecasts by 6.7% to incorporate improved FPSO margins, primarily driven by stronger contributions from FPSO Agogo.
Its FY27 to FY28 earnings estimates are maintained as they already factor in higher uptime and production levels from the recently commissioned FPSOs (Maria Quiteria, Atlanta, and Agogo).
CIMB Research retains its unchanged sum-of-parts-based target price of RM2.93 a share.
At the current share price, Yinson is trading at an FY27 price-to-earnings ratio of eight times, implying a 38.5% discount to its five-year historical average of 13 times.
It reiterates its “buy” recommendation, supported by strong long-term earnings visibility underpinned by Yinson’s sizeable US$20.8bil order book (including potential extensions), which extends to 2050.
