Ezion

Ezion: Macqurie sees another 46% upside iN Ezion's share price, with the house having a Buy call and $3.0 TP. The house notes that despite announcing as many as 7 new contracts in 2014 YTD in addition to making changes to 4 of its existing contracts to make them more value accretive, and increasing its fleet size to 36 vessels, Ezion’s share price has moved sideways as its strategy to create value for investors while continuing to grow strongly is being under-appreciated by investors, in MER’s view. MER sees robust 50% upside in Ezion’s share price from current levels as the company delivers 37% profit compounded annual growth rate over 2013-16E which should lead its PE multiple to compress to 6.8x 2015E and 5.7x 2016E. MER’s estimates for 2015 and 2016 are 7% and 12% ahead of consensus. The house recommends the stock as a value buy with risk-reward strongly in favour: MER believes the current share price does not reflect the pace of fleet growth, impending profitability and reduced leverage. MER recommends Ezion for long-term value buyers.