STOCK FOCUS OF THE DAY
Yinson Holdings : Steady core performance amid Ca Rong Do limbo Buy
We maintain BUY on Yinson Holdings (Yinson) but with a lower sum-of-parts-based (SOP) fair value of RM4.72/share (from an earlier RM5.05)/share), which implies an FY19F PE of 15x, with the removal of the DCF of the group’s 49% -stake in the Ca Rong Do (CRD) floating production, storage and offloading (FPSO) bareboat charter.
Excluding unrealised forex loss of RM62mil, Yinson’s FY18 core net profit of RM346mil was within our and street’s estimates. While we have fine-tuned Yinson’s FY19F earnings, FY20F earnings have been cut by 10% largely from the removal of contributions from the CRD FPSO, currently under a force majeure event against the backdrop of a territorial dispute between Vietnam and China.
Yinson’s FY18 DPS of 12 sen doubled our expectations, largely due to the surprise 4QFY18 payment of a 4 sen special dividend and a final 4 sen payout. The group had secured the US$102mil Lam Son FPSO termination compensation from PetroVietnam in December last year. Hence, we have raised our FY19F-FY21F DPS by 33% to 8 sen, which translates to a payout ratio of 25%.
QUICK TAKE
Prestariang : Software business still rolling Buy
RETAIL RESEARCH
Stocks On Radar: Lee Swee Kiat Group, Hiap Teck Venture, GHL Systems, P.I.E. Industrial
ECONOMIC HIGHLIGHTS
UK – Brexit remains the most significant influence
NEWS HIGHLIGHTS
EcoWorld : 1Q core earnings strengthen
HiapTeck : Sees sevenfold rise in Q2
BAssets : Proposes bonus issue
Adventa : Sees net profit doubling in FY18
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The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.
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