STOCK FOCUS OF THE DAY
Yinson Holdings : Red Emperor and the Ghana fillip
BUY
We maintain BUY on Yinson Holdings (Yinson) with a higher
sum-of-parts based fair value of RM3.97/share (from an earlier RM3.90/share),
which implies a FY18F PE of 16x. Our higher valuation stems from a 26% increase
in the NPV for the Ca Rong Do (Red Emperor) floating production storage and
offloading (FPSO) vessel as its capex has been officially confirmed as
US$648mil vs. our earlier assumption of US$500mil.
This raises the Ca Rong Do FPSO's contribution to Yinson's
SOP to RM394mil, or 36 sen from an earlier estimate of 29 sen. Yinson formally
entered into a consortium agreement yesterday with PetroVietnam Technical
Services Corporation (PTSC) to jointly undertake bareboat charter for FPSO for
Repsol's Talisman Vietnam 07/03 B.V, targeted to commence in August 2019 after
the vessel's conversion.
In a separate development, Yinson's wholly-owned Ghana-based
FPSO vessel, named John Agyekum Kufuor, has achieved first oil 3 months ahead
of schedule from its earlier deadline in August this year. Hence, we have
raised FY18F net profit by 31% for the 8 months' additional earnings
contribution vs. our earlier 5-month assumption. Our FY19F-20F earnings are
unchanged as the US$1bil FPSO would already have been fully operational. Given
Yinson's locked-in earnings visibility with an order book of US$3.7bil (23x
FY18F revenue), the stock currently trades at a bargain CY18F PE of 14x vs.
over 20x for Dialog Group and Bumi Armada.
Others :
Prestariang : UniMy moves closer to break
even
BUY
Tune Protect : Take-up rate for travel insurance to recover
in 2H17
BUY
UMW Oil & Gas Corporation : Expect lower 2Q-3Q
losses
HOLD
Econpile Holdings : Lands RM48.5mil piling job for office
building
HOLD
KL Kepong : Manufacturing earnings held up in
2QFY17
HOLD
Lafarge Malaysia : 1QFY17 hurt by weak sales volume and
ASP
HOLD
Unisem : Investment in new packaging technologies required
to reignite
growth
HOLD
STOCKS ON RADAR
Nylex, Mega First Corporation,Sunway Construction,Superlon
Holdings
ECONOMIC HIGHLIGHTS
Japan : Exports supported by volume growth
NEWS HIGHLIGHTS
M K Land : M K Land gets surprise tax bill, fine totalling
RM80.77mil
7-Eleven Malaysia : 7-Eleven first Malaysian retailer
to accept Alipay
Star Media Group : Star to use proceeds from sale of Cityneon
stake to diversify further
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