CQP - Cheniere Energy Partners: War In Eastern Europe Changes The Equation

• Cheniere Energy Partners saw a strong start to 2022 with their operating cash flow increasing significantly year-on-year, which if continued will easily set a new record.
• They have rolled out a new unitholder returns policy that sees significantly higher distributions.
• Unless their financial performance deteriorates, they are tracking to produce ample excess free cash flow after distribution payments, thereby pointing towards even higher distributions.
• When looking ahead, the Russian invasion of Ukraine creates a very bullish outlook for LNG demand that they are well-positioned to meet.
• Since this stronger financial performance also resolves their very high leverage, I now believe that upgrading to a buy rating is appropriate.

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