Ezion

Ezion: Maybank KE maintains Buy with TP $3 ($2.50 post bonus issue). Notes liftboat contract wins have been the key stock price driver for Ezion, supporting 40% of earnings CAGR forecast over FY13-15e. As the company eventually approaches an optimal liftboat fleet size of 32-35 units (estimated by 1H14), future drivers could come from the Marine Supply Base business (to enter into initial operations by end ’13) and associate, YHM. YHM was acquired to independently carry out oil & gas related services that are complimentary to Ezion’s core businesses. Since the acquisition in Nov 2012, Mr Woo Peng Kong (who used to work alongside Ezion’s CEO in KS Energy) was appointed as YHM’s CEO and $30m was raised via perpetual capital securities. Meanwhile, Ezion’s share of market value of YHM ($165m or $0.16 per Ezion share) has not been accounted for in Ezion’s stock price. Hence, a strategy would be to ride on the potential of YHM is through direct investment in Ezion