PETALING JAYA: RHB Research is optimistic about Yinson Holdings Bhd

, highlighting the group’s shift toward stable, recurring revenue streams from floating production, storage and offloading (FPSO) operations as a key growth driver.

“We remain constructive in our medium- term outlook for Yinson, underpinned by a growing base of recurring FPSO charter income and a robust US$19.3bil order book that provides long-term earnings visibility through 2050,” the research house said in a recent report.

It added that underlying earnings for Yinson should strengthen on the back of a full-year contribution from FPSO Agogo in the financial year ending January 2027 (FY27), while FSO Lac Da Vang remains on track for first oil in the final quarter of 2026, providing an incremental earnings contribution towards the end of FY27 and a more meaningful uplift from FY28 onwards.

RHB Research highlighted that Yinson’s balance sheet continues to strengthen with improved operating cash flows and the transition of FPSO Agogo to non-recourse financing.

The group had reported a solid first quarter ended April (1Q27), with core net profit rising 26% year-on-year to RM121mil.

RHB Research said this figure is at 14% and 18% of its and consensus’ FY27 forecasts, before noting that the group’s results are in line, as earnings are typically loaded towards the back end – supported by higher recurring charter contributions, annual charter escalations, and potential project wins in the later part of the year.

Revenue declined 15% year-on-year to RM1.05bil due to the completion of engineering, procurement, construction, installation and commissioning works for FPSO Agogo, but this was offset by strong charter income.

“More importantly, operating cash flow turned positive at RM689mil, reflecting the group’s transition from an engineering, procurement, and construction-led business model to one that is increasingly underpinned by recurring charter income as construction-related cash outflows tapered off,” said RHB Research.

The research house maintained its “buy” recommendation and a target price of RM3.83, implying a substantial 95% upside from the current share price of RM1.91, along with an attractive FY27 forecast yield of 3%.

“Our target price implies 14.1 times FY27 price-earnings ratio, which is below Yinson’s five-year price earnings mean of 15.1 times – justified by an improving recurring earnings profile, strengthening balance sheet, and long-term earnings visibility.”

The company’s diversified portfolio of FPSO assets, including Agogo, Helang, and upcoming projects, positions it well in the offshore marine sector.

Key downside risks include the inability to secure new contracts and potential contract terminations.