Yinson’s venture in Sterling PBES opens up revenue potential for the group


YINSON Holdings Bhd’s investment into the marine batteries business with Sterling PBES Energy Solutions Ltd, a Vancouver-based energy storage solution (ESS) company, is expected to open up potential revenue for the firm.

RHB Research analyst Sean Lim said Yinson has the highest environmental, social and governance (ESG) score within Malaysian oil and gas (O&G) sector coverage, given its venture into renewable energy and green technologies.

Yinson’s wholly owned Yinson Green Technologies Pte Ltd has invested an undisclosed amount for a 20% equity stake in Sterling PBES.

Sterling PBES designs, builds, commissions and services ESS-based for marine vessels with exclusive partners in North America, Europe, the Middle East, North Africa and the Far East.

Sterling PBES is also looking to lease infrastructure and sell power so that interchangeable containers can be swapped at the port where customers will only pay a fixed monthly fee and a variable charge for consumed electricity, eliminating time-consuming charging.

AmBank Research is also optimistic about the future of Yinson with its new move into the energy sector.

“Assuming interest cost of 4% and 10-year depreciation cycles for capex of US$70 million (RM292.85 million), we estimate the investment could increase Yinson’s earnings by 2% FY22F and more substantially by 10% by FY23F.

“Hence, we are positive on this development which also reaffirms Yinson’s commitment to achieving carbon neutrality by 2030 and its four-star ESG rating,” said AmBank Research.

In addition to the investment, Yinson and Sterling PBES have also entered into a binding memorandum of understanding to form a joint venture to accelerate the large-scale rollout of Sterling PBES’ solutions in selected countries in South-East Asia and beyond; this move is expected to help Yinson achieve its objective for the targeted roll-out of ESS.

There is also an issue of the delay of Parque das Baleais in which Petrobras’ portfolio affirms to be in their priority list — this could mean that Yinson could still be in the game, as there are no updates on a new round of tenders.

The tender outcome will be announced by the first quarter of 2022, and should Yinson win another major project, management will pursue up to RM1 billion in equity funding.

RHB reiterates ‘Buy’, with a new RM7.40 target price from RM 5.81, 20% upside, and 1% yield.