Latest news with #RM9bil
The Star
16-06-2025
- Business
- The Star
Is Yinson's valuation justified?
PETALING JAYA: Yinson Holdings Bhd has once again found itself in the limelight. A recent Bloomberg report claiming that US-based infrastructure investment giant Stonepeak Partners was in exclusive talks to acquire the Malaysian energy infrastructure player sent its shares surging by nearly 14%. Though Yinson has denied any direct involvement in buyout talks, it did admit that major shareholders – including the Lim family, who hold a 26.6% stake – are exploring options with 'various parties'. But as the dust settles, a deeper question emerges: is Yinson truly worth the RM9bil valuation implied in the reported talks? At the time of the report, Yinson was trading at RM2.33 per share, giving it a market capitalisation of about RM7.17bil. The implied RM9bil buyout price suggests potentially up to a 32% upside. Such premiums aren't unusual in strategic merger and acquisition deals, but do the fundamentals justify this leap? The purported talks have brought to light the supposedly low valuations of the company. Yinson's price-earnings ratio (PER) of 6.5 times trails peers Bumi Armada Bhd 's five times and MISC Bhd 's 30 times. But looking at its forward price-earning of about 15 times, this is higher than that of MISC Bhd of 14.3 times forward PER and Bumi Armada Bhd's five times. According to analysts, while Yinson's price-earnings is among the lowest in the sector, this often reflects perceived risks. 'Its high leverage and ongoing capital expenditures for its floating, production, storage and offloading (FPSO) builds are the main culprits,' an analyst tells StarBiz. The company has a total borrowing of RM16.32bil or net gearing (including perpetual securities of RM1.94bil) of 1.8 times in the financial year ended Jan 31, 2025. 'Yet, return metrics like return on equity and net margins remain strong, hinting at robust underlying performance,' he adds. Yinson has positioned itself as more than just an oil and gas contractor. It boasts long-term FPSO contracts, offering stable cash flows. With over US$20bil in contract backlog, the company has visibility well into the next decade. Meanwhile, CGS International Research is not surprised by the news of a potential privatisation as this would mean the shareholders of Yinson should reap significant gains from the potential listing of its subsidiary Yinson Production (YP). The research house says Yinson's plans for the listing of YP in the United States equity markets in five years' time, which would be the key exit plan for Abu Dhabi Investment Authority, British Columbia Investment Management Corporation and RRJ Capital. 'We believe that the listing of YP could yield significant capital gains for Yinson, as it could also do an offer for sale of YP during the initial public offering. 'This is probably the rationale for the potential privatisation of Yinson,' the research house explained. The research house believes that the Lim family would likely at least maintain its 27% equity stake in Yinson if Stonepeak Partners comes in as an equity partner. Alternatively, Stonepeak Partners may provide a loan to the Lim family to privatise Yinson, in which case the Lim family may ultimately hold 100% of Yinson. Generally, analysts are positive on Yinson with 'buy' calls but some have lowered its 12-month target price from RM3.62 to RM3.41 due to short-term engineering, procurement, construction, installation, and commissioning weakness. However, consensus still sees substantial upside with target prices for Yinson ranging from RM3.12 (bearish) to RM5.05 (bullish), with a consensus of RM3.78 – implying a 62% upside from current levels. Maybank Investment Bank Research (Maybank IB) is positive on Yinson, backed by its robust prospects and to benefit from FPSO bids in FY26. 'We believe the FPSO market is currently in the 'Golden Age' due to a robust global tender pipeline with an expected 13 awards over the next 12 months. 'Yinson may be looking for one new job next year (FY26) in the mid-sized segment for bankable projects with high upfront payment from end-clients,' Maybank IB notes. As such, the RM9bil figure with hefty premium appears justifiable for a strategic asset with strong recurring cash flows, particularly in today's market of yield-hungry infrastructure investors. Yinson's valuation, at first glance, seems to reflect investor caution: high debt, negative free cash flow, and macro headwinds. But deeper analysis reveals a fundamentally solid business with long-term income visibility and expansion into renewables. If leveraged effectively, these factors could drive a significant re-rating.
The Star
09-06-2025
- Business
- The Star
Yinson clarifies no buyout amid exploratory talks
KUALA LUMPUR: Yinson Holdings Bhd has clarified that it is not in discussions with any third parties regarding a buyout exercise. However, the group said its executive chairman, Lim Han Weng, is currently engaged in 'exploratory discussions' with various parties concerning potential corporate proposals related to their shareholding. 'However, given that the discussions are still at an exploratory stage, there is currently no conclusive indication that the discussions would give rise to a corporate proposal involving Yinson,' the oil and gas services firm said in a filing with Bursa Malaysia. The company will make the relevant announcement if and when a corporate exercise materialises, in accordance with the Main Market Listing Requirements. Bloomberg reported that New York-based Stonepeak Partners is reportedly in exclusive talks to acquire Yinson, with the potential deal valuing the company at up to RM9bil (US$2.1bil), according to sources familiar with the matter. This could be one of the largest deals in Malaysia this year. Yinson closed down one sen, or 0.43%, at RM2.33 with 19.08 million shares traded.
The Star
09-06-2025
- Business
- The Star
Yinson rises on news of Stonepeak's potential buyout offer
KUALA LUMPUR: Shares of Yinson Holdings Bhd continued to rise in early trade Monday following news of a potential buyout, drawing sustained interest from investors. The oil and gas services firm climbed two sen to RM2.36, with 10.14 million shares traded as of 10.52 am. Year-to-date, the stock has declined about 9%. New York-based Stonepeak Partners is reportedly in exclusive talks for a buyout of Yinson, potentially valuing the firm at up to RM9bil (US$2.1bil), Bloomberg reported, quoting sources familiar with the matter. This could be one of the largest deals in Malaysia this year. ALSO READ: Stonepeak is said in exclusive talks for buyout of US$2.1bil Yinson CIMB Securities said that if the report is accurate, it could potentially lead to a privatisation offer for the remaining Yinson shares. It noted that the market responded positively, with Yinson's share price rising 13.8% on June 6 — its biggest gain since June 2019. The jump narrowed the stock's year-to-date loss from 33.7% to around 11.4%, lifting Yinson's market capitalisation to approximately RM6.5bil. "In our view, the exclusivity arrangement indicates that the deal has entered advanced stages of negotiation, with the Lim family, which is Yinson's founder, holding a 26.6% stake," it said. It added that the deal would also help Stonepeak expand its exposure in Asia Pacific energy infrastructure, where Yinson has already established a solid and growing footprint. CIMB noted that the implied valuation of about 9.5 times FY24 P/E, based on a RM9bil market capitalisation, is at a premium to the 8.2 times average FY24 P/E of Malaysia's leading independent floating production, storage, and offloading (FPSO) operators, SBM Offshore and Modec, which currently trade at P/Es of 4.8 and 11.6 times, respectively. 'In our view, this valuation appears justifiable, underpinned by Yinson's robust project backlog of US$20.5bil and its active portfolio of 8 FPSO contracts. Yinson's growing presence in emerging markets further supports this premium, positioning it for long-term structural growth. 'Furthermore, Stonepeak is expected to price in the strategic value of Yinson's expansion in FPSO contracts, particularly following Yinson's proactive steps to strengthen its financial capacity, including securing US$1bn in funding for its FPSO unit in Jan 2025 from a consortium of institutional investors; and growth in energy transition segments, including its solar and battery storage initiatives,' the research house said. CIMB has reaffirmed its FY26–28F EPS forecasts, buy rating, and sum-of-parts target price of RM2.93.
The Star
08-06-2025
- Business
- The Star
Trading ideas: Yinson, 7-Eleven, Pavilion REIT, CIMB, Ecomate, Ho Hup
KUALA LUMPUR: Stocks to watch today based on their latest news include Yinson Holdings Bhd , 7-Eleven Malaysia Holdings Bhd , CIMB Group Holdings Bhd, Pavilion REIT, Ecomate Holdings Bhd and Ho Hup Construction Company Bhd. New York-based Stonepeak Partners is reportedly in exclusive talks for a buyout of Yinson Holdings Bhd, potentially valuing the firm at up to RM9bil (US$2.1bil), Bloomberg reported, quoting sources familiar with the matter. This could be one of the largest deals in Malaysia this year. 7-Eleven has named Tan Sri Mohd Annuar Zaini as its new independent non-executive chairman, with immediate effect. CIMB Group, the parent company of CIMB Thai Bank, has no plans to increase the bank's public shareholding, despite the Thai unit being suspended from trading on June 5 for failing to meet the 15% minimum public shareholding requirement. Under new rules effective March 2024, non-compliance will lead to suspension instead of fines. Ecomate is acquiring a 60% equity stake in Progressive Computer Systems Sdn Bhd (PCS) for RM8.4mil as part of its strategy to diversify into the information and communications technology sector. Ho Hup has defaulted on revolving credit facilities totalling RM45.27mil, prompting a legal action by AmBank Islamic Bhd. Pavilion REIT has raised approximately RM360mil through a private placement. The funds will partly finance its RM480mil acquisition of Banyan Tree Kuala Lumpur and Pavilion Hotel Kuala Lumpur, with the balance covered by bank borrowings.
The Star
08-06-2025
- Business
- The Star
Stonepeak is said in exclusive talks for buyout of US$2.1bil Yinson
Stonepeak Partners is in exclusive talks for a buyout of Yinson Holdings Bhd that may value the firm at as much as RM9bil (US$2.1bil), according to people with knowledge of the matter, in what could be one of the biggest deals in Malaysia this year. New York-based Stonepeak is teaming up with the Lim family, Yinson's founder and biggest shareholder, to take the Kuala-Lumpur-listed energy infrastructure company private, said the people, asking not to be identified because the discussions aren't public. The Lim family owned 26.6% of Yinson as of May 30. Considerations are ongoing and there is no certainty a deal will be reached, the people said. Yinson's shares jumped as much as 14% following the Bloomberg News report on the talks, the biggest intraday gain since June 2019. That cut the year-to-date loss from 20% as of Thursday's close and lifted Yinson's market value to about 6.5 billion ringgit. Representatives for the Lim family and Yinson declined to comment. Stonepeak didn't immediately respond to requests for comment. Founded in the 1980s as a transport and logistics firm, Yinson has since diversified into energy infrastructure, renewables and technology, its website shows. The company signed an agreement with a consortium of investors in January for a $1 billion funding round for a unit that makes vessels used by the offshore oil and gas industry, Bloomberg News reported at the time. - Bloomberg
