KUALA LUMPUR (Jan 29): Shares of Yinson Holdings Bhd rose in early trade on Thursday after it clinched a contract for the chartering, operation, and maintenance of a floating production, storage and offloading (FPSO) facility of up to US$2.539 billion (RM9.166 billion) for oil and gas (O&G) support operations in Ghana.
At 9.24am, Yinson rose 0.34% or one sen to RM2.91 with 1.02 million shares done.
Yinson (fundamental: 1.5; valuation: 1.5) told Bursa Malaysia yesterday that a consortium made up of its indirect wholly-owned subsidiary Yinson Production (West Africa) Pte Ltd (YPWA) and Yinson Production West Africa Ltd (YPWAL), had been awarded the contract by Italy-based Eni SpA’s unit in Ghana, Eni Ghana Exploration and Production Ltd (Eni Ghana). The FPSO will process O&G from the Offshore Cape Three Points (OCTP) block in the Tano Basin, which is approximately 60km off the coast of Ghana.
AmResearch Sdn Bhd maintained its Hold rating on Yinson with a lower fair value of RM2.85/share (vs. RM2.97/share previously), based on our sum-of-parts valuation, which implies an FY16F PE of 20x.
“This follows the fine-tuning of our assumptions for the contract award for the FPSO in Ghana
“Although we are positive on the award of the contract award, earnings accretion will nevertheless only come three years later. The stock currently trades at an FY16F PE of 20x, compared with Bumi Armada’s 15x,” it said.
The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations. Go to theedgemarkets.com for more details on a company’s financial dashboard.