STOCK FOCUS OF THE DAY
Yinson Holdings: Debt-free Lam Son FPSO BUY
We maintain BUY on Yinson Holdings (Yinson) with unchanged forecasts and sum-of- parts (SOP) fair value of RM4.50/share, which implies an FY19F PE of 154x. Yinson’s 49%-owned floating production storage and offloading vessel (FPSO) PTSC Lam Son has received a fee of US$209mil (RM840mil) for the termination of the bareboat charter effective on 30 June 2017 following the liquidation of Lam Son Joint Operating Company (LSJV). The cash settlement has been deployed to fully settle the outstanding loan on the FPSO, with a net cash balance of US$22mil.
There are still further prospective value enhancements to the group as its now wholly-owned FPSO Four Rainbow, currently idle, could be redeployed in the Southeast Asian region. The group has recently acquired the remaining 49% stake from Four Vanguard Service E Navegacao for US$9mil, which means that the current vessel costs only US$60mil.
Underpinned with locked-in earnings visibility from an order book of US$4.2bil (25x FY18F revenue), the stock currently trades at a bargain CY18F PE of 13x vs. over 20x for Dialog Group and Sapura Energy.
Others :
Plantation Sector : No excitement yet NEUTRAL
STOCKS ON RADAR
Excel Force MSC, Zecon, TRC Synergy, Felda Global Ventures Holdings
ECONOMIC HIGHLIGHT
Thailand: Central Bank expected to maintain policy rate
NEWS HIGHLIGHTS
IPO: Samling is said to prepare US$250 million IPO for Bentley dealer
Kerjaya Prospek: Proposes bonus and warrants issues
Property Sector: Office market crash unlikely, but glut to persist
TDM: Receives Terengganu land for expansion plan
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