Disclaimer: This article is in no way financial advice, nor solicitation to buy or sell shares in this company. It is purely for educational purposes only. You are highly recommended to conduct all necessary due diligence and make your own informed decisions before making any financial decisions. The writer already owns shares in this company and may at any point in time increase or reduce their position without prior notice. Do not try to copy trade!

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Today let’s take a look at a Malaysia company that’s competing, and winning, at the world stage, Yinson Holdings Berhad, the 2nd largest Floating Production, Storage, and Offloading (FPSO) company in the world.

Yinson is one of the leaders in the international FPSO space in the Oil & Gas (O&G) industry, serving oil majors around the globe (the “Petronas” equivalent of other countries like Brazil, Angola, etc).

We will briefly cover the company as well a surface level look at the industry (because O&G is highly complex) before examining Yinson’s financials and the growth story present here.

I will also highlight the recent corporate action of the company and present the valuation difference between what international investors award the company vs their valuation in Bursa Malaysia.

History

Yinson is founded by Mr Lim Han Weng, a billionaire tycoon in Malaysia owning businesses in varied industries. Other listed companies that Mr Lim owns:

1. Lianson Fleet Group (formerly known as ICON Offshore before he took over the company);

2. Handal Indah Mobility (a recent IPO); and

3. Other private businesses.

Currently, his son, Chern Yuan is the CEO of Yinson while Mr Lim remains as the chairperson of the group.

Yinson originally started as a logistics company handling land logistics back in 1984. They got listed in 1996 and continued to grow the logistics business.

In 2011, Yinson ventured into their first offshore production vessels in Vietnam via a 49:51 JV with PTSC Vietnam (Vietnam National Oil and Gas Group). Subsequently, Yinson disposed off all their logistics business to Persada Bina Sdn Bhd, and now this business is known as Swift Haulage (another listed company).

In 2013 and 2014, Yinson successfully delivered FSO PTSC Bien Dong and FPSO PTSC Lam Son and this marked their first successful delivery of a major oil asset and their transition into the FPSO space.

In the same year, Yinson acquired a Norway-listed FPSO player, Fred Olsen Production ASA, for RM550 mil, who owned 3 vessels at the time. Since then, Yinson has continued to bid for and win FPSO projects and currently have an orderbook backlog of US$19.4 bil, with the following assets:

• 8 operational assets;

• 1 nearing completion; and

• 1 under construction.

Yinson also have a few solar farms and other renewable energy initiatives, but the scale of which are small (relative to their FPSO business) so I won’t really be covering them here.

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