Period 2Q13/1H13
Actual vs. Expectations
Yinson’s 2Q13 net profit of RM9.8m brought its 1H13 net
profit to RM20.4m. The 6MFY13 net profit was again ahead of expectations,
accounting for 66% of ours (RM31.0m) as well as 65% that of the consensus’
(RM31.4m) full year estimates.
The variance to our estimate was again due to the better-than-expected
performance from its transport and trading divisions.
Dividends No dividends were declared in the quarter.
Key Results Highlights
YoY, the 2Q13
net profit grew
by 80% mainly
on the back of 1) revenue improvements for the transport and trading
divisions and 2) margin expansion in the marine division (+21.6pts) due to a
full-quarter impact of the new 10,880bhp AHTS in 2Q13. To recap, the new AHTS
started its maiden operations in Apr 2012. We had already included this AHTS in
our assumptions.
QoQ, the 2Q13 net profit was down 10.7% due mainly to the
lower trading division’s earnings. This is
in line with
our previous guidance
that the trading activity will
normalise after 1Q13, which was then buoyed by post-CNY restocking exercises.
Outlook Management guided that there could be a
further slowdown in 3Q13 as the price of its trading division goods in continue
to taper off.
In the long
run, we are positive on the company as its growth trajectory is accelerating. The company is looking to
kick-start its FSO operations in FY14 and FPSO operations in FY15.
Strong links to PTSC are a precursor to more Vietnamese
opportunities and it is expected to post a 3-year net profit CAGR of 38.3%.
Change to Forecasts
Despite the strong performance in 1H13, we are maintaining
our full year numbers as we expect a weaker 2H13 on the back of a slowdown in
its trading division.
We had already factored in some earnings increases in the
previous results season.
A stronger-than-expected trading division performance in
3Q13 could prompt us to review our forecasts later.
Rating MAINTAIN OUTPERFORM
Valuation Our target price is unchanged at
RM2.68/share based on FY14 Sum-of-Parts (SOP) valuation.
Risks 1) Significant reliance on Petrovietnam poses
an earnings risk to Yinson; 2) high capex requirements and 3) contractual and
project execution risks of new projects due to its inexperience.
Source: Kenanga
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