Yinson Holdings Bhd (YINSON) exceeded expectations in 1QFY25, with core net profit significantly surpassing forecasts due to the reversal of cost provisions from FY24. This led to a 48% increase in CGS Investment Bank’s (CGS) FY25F core net profit forecasts, bolstered by stable revenues from operational FPSO units despite lower EPCIC revenues as projects approached completion stages.
CGS maintains its BUY rating on YINSON and has raised its SOP-based Target Price (TP) to RM3.83 following strategic capital exercises by YINSON, including debt maturity extensions and effective cost management. These measures, alongside an anticipated US$1 billion capital raising for FPSO portfolio expansion, underscore Yinson’s commitment to enhancing shareholder returns.
The FPSO Atlanta and FPSO MQ, nearing completion milestones with the first oil expected in August–September 2024 and Sep-Oct 2024 respectively, position YINSON for substantial revenue growth in the near term. These projects are pivotal as they contribute to CGS’s positive outlook, with FPSO MQ projected to start charter hire in Feb 2025F, potentially exceeding current FY25F forecasts. FPSO Agogo’s progress also supports future revenue expectations, with charter hire anticipated to commence from Feb 2026F.
Investors are advised to consider YINSON shares given CGS’s BUY rating, its robust operational performance, and strategic initiatives aimed at enhancing shareholder value. With a revised TP of RM3.83 and potential catalysts such as FPSO project completions and capital raisings, YINSON presents a compelling investment opportunity.
