KUALA LUMPUR: Yinson Holdings Bhd could be tapping into a huge growth opportunity in the global marine energy storage solutions (ESS) market following its recent stake purchase in Sterling PBES Energy Solutions Ltd (SPBES).

       The group announced in a filing with Bursa Malaysia yesterday that it had invested in the Canada-based ESS provider through its Singapore-based subsidiary Yinson Venture Capital Pte Ltd.

       Maybank Investment Bank Research said the purchase, if rightly executed, has enormous potential given the growing global marine ESS market worth about RM150bil.

       "Yinson’s latest strategic green investment in SPBES is a synergistic fit to its existing marine operations and accelerates its transition to a net zero carbon entity.

       "Electrifying marine vessels is a clear alignment with its sustainability and climate goals," it said.

       According to the research house, SPBES brings ready to market zero emission turnkey solutions, such as electrifying vessels via fixed battery and battery swaps solutions for shipping/ marine transport, which can reduce emissions by 20%-100%.

       The firm is focused on the marine sector with operations in 10 countries and installation partners in 26 countries, and is ranked third in this category by projects deployed after Corvus Energy and Leclanche. The firm's CEO, Brent Perry, was the founder of Corvus.

       Meanwhile, Maybank IB noted that SPBES has 829MWh in pipeline capacity for 365 projects spanning over 400 vessels with a combined contract value of US$576mil.

       In terms of business model, it said SPBES is capital light with revenue break-even point at US$20mil.

       "It is EBITDA positive (USD2m in FY21; YE Mar), a positive and is projected to grow to USD33m/ USD125m/ USD245m/ USD354m in FY22/ 23/ 24/ 25 respectively.

       "We estimate that Yinson is acquiring its 20% stake at SPBES at 3x FY22 EV/EBITDA. Its order backlog is at USD31m," it added.

       Apart from Yinson (20%), the major shareholders of SPBES are Shapoorji Pallonji Intl (29%), Sterling and Wilson (21%) and company founders TTB Holdings, Brent Perry and company president Paul Hughes (30%).

       Maybank IB maintained its "buy" call and target price on the stock at RM6.18.

       RHB Research is also positive on Yinson's stake purchase although it noted that near-term earnings contribution is expected to be minimal.

       "Services revenue should increase in the long run, with wider clientele and aging ESS.

       "SPBES is also looking to lease infrastructure and sell power, whereby interchangeable containers can be swapped at the port. Customers will only pay a fixed monthly fee and variable charge for consumed electricity, eliminating time-consuming charging," it said in a note.

       The research firm, which has a "buy" call on Yinson, lifted its target price to RM7.40 after factoring in one new project win.