KUALA LUMPUR: Maybank IB Research believes that Yinson Holdings Bhd has the capacity to take on two new jobs, consisting of mid-size floating, production, storage, offloading (FPSO) and one large-scale project, without going into systemic risk.
It said the energy infrastructure and technology company is well entrenched to capitalise on the resurgence of the FPSO tenders pipeline over the next 12 months.
In its research note, Maybank IB said with just the Marlim 2 project ongoing, Yinson could realistically take on two FPSO jobs with a combined capital expenditure value of US$1.5bil (RM6.3bil) without straining its balance sheet and avoids potential systemic risk.Yinson FPSO Helang
Hence, Maybank IB has raised its 12-month target price for Yinson by 61% to RM10.90 from RM6.65 previously.
It said the two jobs could add about RM5.1bil in net present value.
Maybank IB noted that the FPSO business is back booming again, with demand for FPSO now stronger than the pre-Covid19 crisis level.
“The market is getting tighter. Up to 17 firm prospects are being lined up over the next 12 months. At the same time, supply is tightening.
“Unlike 2019, many tenders now are only able to attract single bids due to the higher degree of difficulty in securing financing and the limited capacity by FPSO operators to take on new jobs,” it said.
The research house said the dynamic situation offers the operators strong leverage during negotiation talks, with the enviable position of being able to pick and choose projects. — Bernama