Thursday, April 10, 2014

Ezion

Ezion: Maybank-KE sees strong mutual benefits in the potential collaboration of AusGroup and Ezion due to the synergies between the businesses of both parties. As a guide, AusGroup fabricates modules and structures for the oil and gas and resources sector, while Ezion provides offshore logistic support services for oil and gas projects in Australia. With Ezion currently developing Port Melville in Northern Territory of Australia, Maybank-KE believes that the port could be used as logistic base to support AusGroup’s future projects. In the house view, there is an inherent longer term strategy, especially in the development of Port Melville. With Ezion now the single largest shareholder of AusGroup, the latter could be roped in to help develop the port, so that Ezion could concentrate on growing its core liftboat business. AusGroup had also announced that it is looking to raise $25.7m through placement of 70m new shares to expand into onshore and offshore marine logistic services and related support services in Australia. Overall, Maybank-KE continues to like Ezion for its lucrative liftboat business. The potential from its Australia business could serve as a long term catalyst. The house maintains Buy with a $2.90 TP pegged to 13x FY14E P/E.

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