Tuesday, March 24, 2015


Ezion: Maybank-KE reiterates its Buy call with TP of $1.83, highlighting that European-based liftboat operator, Gulf Marine Services (GMS), has returned 25% YTD while Ezion is down 7%. As a guide, GMS focuses on the Middle East and North Asia (MENA), while Ezion leads in the Asia Pacific.

Yet, despite having similar operational metrics, GMS trades at a higher 6.4x FY15E P/E versus Ezion’s 4.8x, while in terms of P/B, Ezion’s 0.8x FY15E is about half of GMS’s. This disparity is puzzling in the house opinion, as Ezion is not inferior to GMS in any way.

Maybank-KE believes that the market should not associate Ezion’s resilient liftboat business with offshore drilling. While there have been spurts of contract terminations and charter-rate declines for offshore drilling rigs, enquiries on liftboats for maintenance remain high in Asia and the Middle East.

The house added that some 90%/82% of Ezion’s FY15E/16E liftboat revenue of US$480m/626m is backed by firm contracts, and believes that the market is mispricing Ezion.

At 3.5x FY16E P/E, it even ignores the group’s 28% FY16E EPS growth. Steady earnings deliveries over the next few quarters will help to catalyse the stock.

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