In 2014, Yinson acquired Fred Olsen Production ASA, an established FPSO player listed on the Norwegian stock exchange. Subsequently, Yinson decided to transform itself into a full-fledged FPSO company by divesting itself of all its non-O&G businesses.

While pre-tax profit of RM292.76 million for the financial year ended Jan 31, 2016 (FY2016) was only a low single-digit growth from RM280.7 million in FY2015, the company benefited from a low base in FY2012 and FY2013 when profits were below RM50 million — about six times less. Between FY2012 and FY2015, profit before tax grew at a three-year compound annual growth rate of over 100% — earning Yinson top placing among its industry peers.

Its earnings growth is also reflected in its share price, which has more than tripled in the past three years — although it is currently about 10% off its peak seen in 2014 when crude oil commanded better prices.

Liaw Thong Jung, an analyst with Maybank Investment Bank Research, says Yinson is still searching for growth opportunities in this challenging environment. “In its tender pipeline are two to three firm FPSO prospects worldwide (Asia and Africa). Securing an FPSO job or redeployment opportunities via its 51%-owned FPSO Four Rainbow is a long-term catalyst, which would extend its growth trajectory beyond FY2019,” he says in a recent note.

Yinson secured its largest FPSO contract to date from Eni Ghana Exploration & Production Ltd in 2015 on a long-term basis. The vessel will be working in Offshore Cape Three Points in Ghana. The contract has an aggregate value of up to US$3.256 billion and the FPSO vessel is expected to achieve its first oil by mid-2017.

In Yinson’s 2016 annual report, executive chairman Lim Han Weng says, “The morale of the team is boosted by the fact that all of our chartered FPSO [vessels] are operating on a consistent uptime of above 99% and therefore, Yinson is committed to maintain the excellent track record for many years to come.”

On July 26 this year, the company announced the completion of the disposal of its non-O&G subsidiaries to Liannex Labuan Ltd for RM223.2 million, slightly lower than the initial offer price of RM228 million announced in January. According to the announcement, the total consideration is subject to an audit that is expected to be completed in October. Pending the audit completion, Yinson intends to declare a special dividend of up to RM160 million or 15 sen per share (ex-date Aug 14 and payable on Aug 18).

The completion of the divestment will turn Yinson into a pure FPSO company, in line with the board’s and management’s vision to focus on growing its O&G business.

At the time of writing, four of the five analysts tracking Yinson had a “buy” recommendation on the stock with target prices ranging from UOB Kay Hian Research’s RM3.03 to Maybank’s RM4.35, averaging at RM3.65, Bloomberg data shows.