STOCK FOCUS OF THE DAY
Yinson Hldgs : Larger-than-expected boost from Ghana FPSO BUY
We maintain BUY on Yinson Holdings (Yinson) with a higher sum-of-parts-based fair value of RM4.50/share (from an earlier RM4.30/share), which implies an FY19F PE of 12x. Our FY18F earnings have been raised by 10% as the group’s 1HFY18 core net profit of RM187mil came in above expectations, accounting for 68% of our FY18F forecast and 71% of consensus.
However, we have only slightly raised FY19F-FY20F earnings as the group’s sale of a 26% equity stake in its wholly-owned floating production storage and offloading vessel (FPSO) John Agyekum Kufuor (JAK), expected to be completed by December this year, will lead to a moderation in the earnings momentum. We have also raised our FY18F-FY20F dividend assumptions as Yinson has declared an interim dividend of 4 sen dividend, 2x above our forecast for the full year.
Yinson’s 2QFY18 core net profit surged 41% QoQ to RM110mil due to the commencement of the JAK FPSO, formerly named Yinson Genesis, and deployed currently at Ghana's Offshore Cape Three Points block. This also drove the group’s EBITDA margin from 59% in 1QFY18 to 85% in 2QFY18. Over the longer term, Yinson’s earnings growth will be further supported by its 49%-owned Ca Rong Do (Red Emperor) FPSO, which is targeted to achieve first oil in September 2019.
Others :
V.S.Industry : Continuous earnings delivery BUY
Sapura Energy : Dampened by low 40% rig utilisation HOLD
STOCKS ON RADAR
JHM Consolidation, Leon Fuat, Pantech Group Hldgs, Hiap Teck Venture
ECONOMIC HIGHLIGHT
Thailand : BoT holds rate despite concern on strong baht
NEWS HIGHLIGHTS
Property Sector : Pavilion project bucks trend
FFHB : Construction to drive revenue growth
GBH : Robert Tan sells 51% stake for RM145.7m
BJFood : Eyes profitable BRoasters in FY18
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