Ezion

Ezion: Nomura held an investor conference. Notes the group is almost ready to embrace cabotage rules in SEAsia CEO, Mr Chew Thiam Keng, said the group is in final phases of finding the right ownership and operational structures to better accommodate the cabotage rules in Malaysia and Indonesia. These would be applied to the next charter-out contract wins in these 2 countries. As a recap, Ezion’s niche supply of liftboats / service rigs to support fixed production platforms in SE Asia has gained increasing acceptance in the past 2-3 years. The contract win momentum will be better and contract duration will remain long, if Ezion can bid for charter-out contracts in Southeast Asia using local-flag liftboats, vs the current need to seek exemption for each contract using Singapore-flag unit. MEanwhile, demand for Ezion’s liftboats in ASEAN is good; amidst weak competition. On future vessel delivery delays, it blamed the tight equipment supply and less experienced yards for delays in 1H14, but stressed that these vessels are either delivered or will be delivered in the rest 2H14. Nomura maintains Buy with TP $3.13