Eye on stock -Yinson Saturday, 27 June 2015

by **Cals** Sat 27 Jun 2015, 23:13

Eye on stock

Saturday, 27 June 2015

OFFSHORE support services provider Yinson Holdings Bhd recently proposed to place out RM300mil worth of shares to pare down its bank borrowings.
“We believe that this is a pre-emptive move by Yinson to deleverage and free up cashflows to take on more projects going forward,” AmResearch says.
The research outfit which is maintaining its “buy” call on the stock with a fair value of RM3.60 notes that Yinson is actively bidding for more floating, production, storage and offloading or FSPO contracts.
One such contract is the Ca Rong Do project in Vietnam by Talisman (now Repsol), it noted citing information obtained from international oil and gas magazineUpstream.
AmResearch also notes that Yinson’s plan to divest its non-oil and gas operations valued at about RM273mil this year will further help pare down its gearing levels.
Shares in Yinson have risen about 16% so far this year bucking the weak performances of most of its peers on Bursa Malaysia.
For the financial year ended Jan 31, the company made a net profit of RM247.5mil, up 77% from RM139.75mil previously due, among others, to a one-off gain from the disposal of a subsidiary and joint venture, increase in forex exchange gains, fair value gains on forward contracts and increase in contribution from marine segment.
Revenue for the period gained 14.67% to RM1.08bil from RM941.86mil a year earlier.
Yinson re-emerged on investors’ radar in March following the entrance of Tan Sri Mokhzani Mahathir and his close associate, Yeow Kheng Chew into the company.
The comments above do not represent a recommendation to buy or sell.