Ezion: Following a change in management, AMS has withdrawn its lawsuit against Ezion and released and discharged the latter from all claims alleged. The sotck has been sold down 15% since news of the lawsuit broke. With AMS taking responsibility over its team, Maersk may be willing to give the operator a second chance, and the charter agreements will remain in place.
On the operational front, 3 of the 4 liftboats due in the 2nd quarter have been delivered and are not working. The 4th is still on track. Ezion’s fleet growth of 60% from 20 units to 33 units this year could drive 18%/45% earnings growth in FY15F/FY16F.
Ezion remains a conviction Top Pick, offering highest earnings growth for this beleaguered industry with the highest visibility. Contract wins are key near-term catalysts and risks remain with units operating in uncertain environment in Mexico. RHB maintains its BUY rating with TP: $2.10.
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