Ezion

Ezion: Kicked off 2014 with two accretive rig acquisitions from associated companies. It has bought back the liftboat it operates under a S&L arrangement for US$72.5m and simultaneously also bought a further 50% stake in KOV assets deployed in Alaska for an equity value of US$24m. Ezion will issue 18m shares to pay for the acquisition resulting in 1.5% dilution. However, with immediate contribution from both assets, CLSA raises its FY14 forecast around 5% while reducing its order win estimate for FY14 to 7 new projects. Mgt remains optimistic on 2014 new order prospects with Indonesia, Mexico, Middle East and West Africa being potential hotspots for high-spec liftboats. While Ezion is now a consensus Buy and market expectations are relatively high, CLSA believes that a combination of strong order momentum and inexpensive valuations will continue to drive price performance. Maintain Buy with TP $2.80.