Ezion

Ezion: DBSV maintains Buy with $1.35 TP. House hosted Ezion’s mgt on a nondeal roadshow in Hong Kong recently. The industry outlook remains buoyant as mgt indicated its ability to secure more projects is limited only by its balance sheet. Investors’ feedback was positive on the back of Ezion’s robust contract wins, strong earnings growth and visibility, niche market positioning and ability to repeatedly secure highly profitable and long-term contracts with relatively short payback periods. Ezion’s robust contract wins YTD implies FY12/13 capex of US$424m/US$121m. Mgt reassured investors this is adequately funded with US$155m raised YTD, without having to tap the equity market again. Ezion is comfortable taking on at least one more service rig project or other projects with longer delivery lead times in the near term. DBSV expect Ezion to post robust sequential earnings growth over the next 6 qtrs as projects kick in progressively from Jul12, supporting projected FY11-13 earnings CAGR of 53%. Grp’s strategy of entering into long-term vessel charters or logistics services contracts will ensure high earnings stability and visibility.