Ezion Holdings: BUY S$0.61; Bloomberg : EZI SP
High growth trajectory intact;
PriceTarget : 12-Month S$ 0.82 (Prev S$ 0.86)
· Robust FY10 earnings growth of 104% intact, despite delayed contributions from liftboats 3 and 4.
· Multiple growth drivers to support FY10-12F EPS CAGR of 32%.
· Maintain BUY, +34% to revised TP of S$0.82.
Ezion continues on high growth trajectory. Due to certain modification works on liftboats 3 and 4, we push back their contributions to mid Oct 2010 and early 2011 respectively, resulting in a 7% reduction to our headline FY10 earnings. Despite this, we expect Ezion to post robust earnings growth of 104% y-o-y for FY10.
Ezion to deliver FY10-12 EPS CAGR of 32%. Looking beyond FY10, we believe Ezion’s high growth trajectory remains intact, with multiple earnings drivers in place – FY11 growth will be driven by a cumulative 36 months of contributions from 3 newbuild liftboats (vs. 13 months contributions from 2 in FY10), plus contributions from Gorgon. For FY12, contributions from the recently secured marine supply bases and the fifth liftboat are expected to underpin earnings growth of 24% y-o-y, to S$74.9m.
Recently announced LOI not yet factored into numbers. Ezion recently announced a LOI worth around A$70m from a multi-national oil major for the provision of marine logistics work. Work is expected to start late 1Q2011 and run over 4 years. This is expected to contribute c. S$1.8m (or 3% of FY11F) to the group’s bottom line on an annualized basis, and represents upside to our FY11 numbers.
Maintain BUY with 34% upside. Our TP is slightly reduced to S$0.82 (prev S$0.86) on lowered FY10 numbers, pegged to 12x blended FY10/11 currently. The impending delivery of its 3rd liftboat with a likely back-to-back charter contract will provide the impetus for us to roll over our valuation to FY11 EPS on better earnings visibility.
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High growth trajectory intact;
Price
· Robust FY10 earnings growth of 104% intact, despite delayed contributions from liftboats 3 and 4.
· Multiple growth drivers to support FY10-12F EPS CAGR of 32%.
· Maintain BUY, +34% to revised TP of S$0.82.
Ezion continues on high growth trajectory. Due to certain modification works on liftboats 3 and 4, we push back their contributions to mid Oct 2010 and early 2011 respectively, resulting in a 7% reduction to our headline FY10 earnings. Despite this, we expect Ezion to post robust earnings growth of 104% y-o-y for FY10.
Ezion to deliver FY10-12 EPS CAGR of 32%. Looking beyond FY10, we believe Ezion’s high growth trajectory remains intact, with multiple earnings drivers in place – FY11 growth will be driven by a cumulative 36 months of contributions from 3 newbuild liftboats (vs. 13 months contributions from 2 in FY10), plus contributions from Gorgon. For FY12, contributions from the recently secured marine supply bases and the fifth liftboat are expected to underpin earnings growth of 24% y-o-y, to S$74.9m.
Recently announced LOI not yet factored into numbers. Ezion recently announced a LOI worth around A$70m from a multi-national oil major for the provision of marine logistics work. Work is expected to start late 1Q2011 and run over 4 years. This is expected to contribute c. S$1.8m (or 3% of FY11F) to the group’s bottom line on an annualized basis, and represents upside to our FY11 numbers.
Maintain BUY with 34% upside. Our TP is slightly reduced to S$0.82 (prev S$0.86) on lowered FY10 numbers, pegged to 12x blended FY10/11 currently. The impending delivery of its 3rd liftboat with a likely back-to-back charter contract will provide the impetus for us to roll over our valuation to FY11 EPS on better earnings visibility.
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