Ezra

Ezra: Ezra’s 1QFY8/15 subsea earnings were disappointing and CIMB would have preferred a more forthcoming disclosure on its vessels maintenance programme. However the stock remains an Add, on valuation call. It is trading at a new trough of 0.3x P/BV vs. GFC of 0.43x. The share price could swing positively on the back of a seasonally stronger 2H15, driven by 73% yoy recovery in earnings with higher subsea projects execution and margin expansion from offshore support. Ezra’s subsea order book stood at c.US$1.2b, with a new A$130m contract for Apache Australia. However, CIMB cuts order wins from US$1.2b to US$800m for FY15-17 as award momentum could slow given the current oil environment.