Friday, June 15, 2012

Ezra

Ezra: CIMB maintains O/p with $1.21 TP. House note that Ezra is on the road to recovery and heading for a 40% 3-year earnings CAGR, backed by improving Subsea and stabilising Offshore operations. House believe its stock could rebound on qoq earnings improvements and contract wins, potentially trading up to its 52-week average of S$1.20 (30% upside). House discussions with management suggest that Offshore utilisation has picked up slightly in 3Q12 as a few vessels that were off-hire return to operations. Believe Ezra can meet its gross-margin target of 25% in 2H12 (1H12: 20%). Day rates have bottomed across regions (South-East Asia, India and West Africa), although they are still about 20% below peak in 2007/08.

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