Kenanga upgrades Yinson to 'outperform'

TheStar Wed, Jan 13, 2021 08:55am - 1 month ago

KUALA LUMPUR: Kenanga Investment Bank Research has upgraded Yinson Holdings Bhd to "outperform" as it expects the group to secure at least one new contract during the year.

Yinson is in the midst of rebidding for three projects, namely Limbayong FPSO in offshore Sabah, Pecan FPSO in offshore Ghana and Parque das Baleias off Brazil.

The timelines of these projects were deferred from last year and bidding is expected to be reopened for submission in the near future and contract awards announced by 2H21, said Kenanga.

"Seeing that Yinson is deemed a potential favourite in all three of these upcoming tenders, we see it likely for Yinson to secure at least one new win during the year.

"However, note that our valuations have yet to factor in any potential upcoming equity fund raising / rights issue, which may be necessary in funding these new projects in the event of a contract win," said Kenanga.

Keen investors should also be wary of the counter’s risk of failing Shariah-compliance during the year, it added.

The research house raised its sum-of-parts target price on the stock to RM6.95 from RM5.50, implying 13x price-earnings on forecast FY22.

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