Ezion

Ezion: Heading into FY14 CLSA remain confident that a combination of expanding fleet as well as contribution from existing assets will drive strong share price performance. House are forecasting 8 new contract wins in FY14 and believe that Ezion can grow its fleet to 45-50 assets over next three years, supporting strong earnings growth over next 5 years. In a bear case scenario wherein future business conditions deteriorate significantly, Ezion does not grow its fleet any further and its non-core associates also do not take off, the stock should still be worth its NAV of $1.81. Meanwhile, stock could have 60-70% upside from current levels in a blue sky scenario. CLSA maintain Buy with $2.80 TP (implied 27% upside). Ezion is its top small cap pick heading into 2014 with strong order momentum and reasonable valuations being key drivers. Further, if Ocean Sky and YHM are able to transform into real businesses, it could offer further upside to stock. Even after the sharp run up stock is still trading at 10x FY14 and 8x FY15 PER i.e. at par with peer group.