KUALA LUMPUR (June 21): Yinson Holdings Bhd, which has been assigned a higher target price by a research house, rose by as much as 6.4% today.

The counter closed 25 sen or 4.3% higher at RM6.06 after rising to RM6.18. It was actively traded with 8.28 million shares done.

UOB Kay Hian, in a research note today, said Yinson's final negotiations for the lucrative Brazilian Marlim floating production storage and offloading (FPSO) could add RM2.87 a share to the research house's target price valuation.

Citing a June 14 article from Brazilian News Insight, UOB said both Yinson and Modec Inc have been invited by Petrobras for final verbal negotiations for the two Marlim FPSO contracts.

"Recap that Yinson [bid] for a daily rate that is US$100,000 higher than Modec's US$570,000-650,000, given that this could be Yinson's first Brazil contract. We assume the eventual scenario will be for Yinson and Modec to secure one of each potentially in the next few weeks, with lucrative contract values of >US$6.5 billion up to 25 years.

"Upon the first oil target by 2023, Marlim could contribute RM275 million net profit to Yinson (after divesting a 30% stake to its Japanese partners) while our target price estimate is as high as RM2.87 per share," UOB said.

The research house has maintained a "buy" call with a higher target price of RM7.25 from RM5.15 previously.

It added that Yinson is likely to secure three more contracts aside from Marlim.

Just recently, the upstream offshore services group secured a four-year extension of its FPSO Adoon charter contract worth US$137.5 million (RM574.1 million).

Year to date, the counter has appreciated by 44%.