KUALA LUMPUR, Oct 2 — AmInvestment Bank has estimated a minimal earnings reduction for Yinson Holdings Bhd of between RM1 million and RM2 million, assuming the company’s procurement and installation costs of ChargEV.
The company via its unit, Yinson Green Technologies (M) Sdn Bhd has signed an agreement with GreenTech Malaysia Alliances Sdn Bhd (GTMA) to speed up the development of electric vehicle (EV) charging infrastructure in Malaysia.
Yinson Green Technologies (YGT) and GTMA, a unit of Malaysian Green Technology and Climate Change Corporation (MGTC) would undertake the development and Yinson would have the majority stake to provide EV charging stations in the country.
AmInvestment said the term sheet covers YGT initially owning a 70 per cent equity stake in the joint venture, which will be injected with GTMA’s wholly-owned ChargEV, currently owning over 400 charging stations nationwide and dominates this segment as other operators ParkEasy, JomCharge and ChargeN’ Go have deployed only 60 at this stage.
“ChargEV charges RM240 annually for unlimited charging on its 9,850 members currently. While no financial details have been disclosed, we expect ChargEV to be loss-making, given an estimated annual revenue of RM2.4 million based on the present payment structure.
“Assuming procurement and installation costs at RM30,000 per unit, we estimate that Yinson’s investment could be below RM10 million i.e. 0.2 per cent of the group’s market cap,” it said.
The investment bank said assuming interest costs at 5.0 per cent, it estimates a minimal earnings reduction of RM1 million to RM2 million, which is 0.4 per cent of financial year 2022 forecast earnings per share.
Going forward, management expects the government to introduce more incentives to encourage EV adoption in line with the country’s green agenda.
This could escalate the number of fully battery-powered EVs from 200 and hybrid plug-ins from 52,000 currently.
Together with new payment schemes, this is envisioned to turn around ChargEV to profitability.
“Notwithstanding, the slight immediate earnings erosion, we are neutral on this development that reaffirms the group’s net-zero carbon ambition which has led to investments of up to RM60 million into green technologies in addition to its 330MW solar projects in India.
“This justifies our 4-star ESG rating for the group which still derives most of its earnings from the oil and gas sector.”
AmInvestment maintained a buy call on the stock with a fair value of RM7.20.
Shares of Yinson Holdings fell 0.51 per cent to RM5.84 with 207,100 shares transacted. — Bernama
