Friday, May 14, 2010

Ezion

(8:53:53 AM) : Ezion’s 1Q10 earnings grew by 133% to $7.7m, on the back of 75% revenue growth to $25.5m. The strong YoY growth was driven by its chartering and offshore support vessels, due to firmer rates as well as additional vessels. This also includes some contributions from the first liftboat. Excluding the extraordinary gains, core earnings are still projected to grow by 125%. Notably, associate earnings also contributed some $2m in earnings as the first earnings from its Gorgon venture kicks in.

Going forward, Ezion’s FY10 earnings will be further driven by revenues from its 3rd and 4th liftboat from 3Q and 4Q respectively, as well as from its contract for Gorgon. Ezion’s 3-yr earnings CAGR of 62.4% p.a. looks intact, with potentially more upside from new ventures in Western Australia. KE maintain our Buy recommendation with target price of $0.99, based on core earnings PEG of just 0.25x.

*Technical* Ezion surged abt 10% over the past 6 trading days. Price level at 0.70 may be tested as support. Short-term resistance @ 0.73. A breakdown below 0.70 indicates a deeper correction is underway.

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