Ezion

Ezion: Ezion recorded positive 2Q14 results, with net profit of US$45.5m (+26% y/y) and revenue of US$92.6m (+38%), taking 1H14 earnings to US$90.7m (+10%) and revenue to US$187.1m (+53%), 43% and 38% of consensus 2014 forecast. We think the results came in slightly ahead of consensus 2014 forecast, given that most analysts were expecting the numbers to come in only in 2H. The improved topline were buoyed by chartering contribution from deployment of additional liftboats and jack-up rigs, which management expects momentum to continue into 2H14. In addition, group continues to witness strong demand for platform and well-related work from the oil majors in Asia Pacific, Middle East and West Africa regions. The focus for Ezion would be how the management intends to use the capital which the group derived from the sale of its marine base and Australian vessel businesses to Ausgroup. In addition, investors are also optimistic on how the recent entry of Malaysia's Quek Leng Chan would contribute to Ezion's business opportunities in Malaysia. We note that Ezion remains the top pick in the offshore and marine sector for most broking houses for its fundamentally sound and visible earnings growth. The street has 13 Buys, 0 Hold and 2 Sell ratings with a 12-month TP of $2.67. At the current price of $2.11, Ezion trades at 10.3x forward earnings, slightly ahead of the asean peers of 10x.