Ezion 3rd Quarter results

Ezion Holdings: Ad-hoc project bumps up revenue (OCBC)

Summary: Ezion Holdings (Ezion) reported a 120.7% YoY rise (+39% QoQ) in revenue to S$45.7m and a 143% increase (but -39.4% QoQ) in net profit to S$10.0m in 3Q10. Revenue was much higher than expected and we understand that this is mainly because the group had undertaken an ad-hoc marine services project in relation to the Gorgon project, contributing S$11m to total revenue. Core net profit was also higher than expected such that 9M10’s figure accounted for 83% of our full-year estimate. Ezion expects more assets to be deployed in 4Q10, and this includes the third liftboat which started contributing in the latter half of October this year. Demand for its liftboats is expected to remain good. Meanwhile, the group will also continue to pursue business opportunities and projects in Australia and its vicinities. We maintain our BUYrating and fair value estimate of S$0.82. (Low Pei Han)

Ezion Holdings - 3Q10: Strong 3Q10 results to continue into 4Q10. (UOBKH)
(BUY/S$0.735/Target: S$0.90)
FY11 P/E (x): 9.0
FY12 P/E (x): 7.4
Strong 3Q10 on contribution from new assets. Ezion Holdings (Ezion) reported 3Q10 revenue of S$45.7m (+120.7% yoy, +38.9% qoq) and net profit of S$10.0m (+143.3% yoy, -39.4% qoq). Improvement in revenue was attributed to contributions from: a) the third liftboat unit, b) deployment of vessels to Australia, and c) marine services provided in relation to the Gorgon project. Weaker sequential earnings were due primarily to S$7.5m gains on the partial sale of the first liftboat unit which was booked in 2Q10.
Maintain BUY, target price at S$0.90. Ezion is currently trading at 9.0x 2011F PE and 7.4x
2012F PE. We value Ezion at 11.0x 2011F PE, based on 2-SD above long-term PE mean for asset owners. With the progressive deliveries of two more liftboats in 2010 and 2011, increasing exposure to the Gorgon gas project in Australia, and potential fleet expansion, Ezion remains one of our top picks in the oil services sector.