Thursday 28 Mar 2024
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KUALA LUMPUR (July 10): RHB Investment Bank Bhd had today raised its Yinson Holdings Bhd share target price (TP) to RM7.77 from RM7.60 after the oil and gas support services provider announced yesterday a deal to sell a minority stake in 75%-owned entity Yinson Boronia Consortium Pte Ltd (YBC) to Kawasaki Kisen Kaisha Ltd (K Line) for US$49 million (about RM209 million).

Yinson Holdings said its indirect wholly-owned subsidiary Yinson Acacia Ltd (YAL) had yesterday executed the share sale and purchase agreement with K Line for the disposal of approximately 8.5% to 10% in YBC, via YAL, to K Line.

YBC is engaged in investment holding activities involving the time charter and service contracts with Petrobras for the provision of the Marlim 2 floating production storage and offloading unit at the Marlim oil and gas field located offshore Brazil.

Today, RHB analyst Sean Lim wrote in a note: "We make no change to our earnings estimates as the Marlim 2 project will only contribute to group numbers in FY24. We cut Yinson’s equity stake in Marlim 2 project to 65%, from our previous in-house assumption of 70%. That said, our SOP (sum-of-the-parts valuation) -based TP rises slightly to RM7.77 from RM7.60, mainly due to the lower net debt value as of FY20, after updating the latest numbers from its annual report, masking the lower equity stake from Marlim 2. 

“Risks are contract terminations and being unable to secure new jobs,” Lim said.

CGS-CIMB Securities Sdn Bhd analyst Raymond Yap wrote in a note today that the research firm reiterated its “add” call on Yinson Holdings but trimmed its TP for the stock to RM6.94 from RM7.07.

"K Line gets a great deal, less so for Yinson,” Yap said.

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