Ezion Holdings (Ezion) has performed very well so far this year, with its stock price up about 99% YTD. The good showing is mainly due to the clinching of contracts at attractive rates of return, smooth execution of projects, and commendable quarterly earnings. As we expected last year, 2012 was no less eventful than 2011 for Ezion, which continued to secure liftboat and service rig contracts for work in various parts of the world, and embarked on new initiatives such as its proposed acquisition of YHM Group. Looking ahead to 2013, we expect more news flow as additional assets are deployed, solidifying its earnings base. Though 2012 has been a fantastic year, we believe that the best is yet to come, assuming no major change to its current operational status quo. Maintain BUY with S$1.70 fair value estimate.
What a run!
Ezion Holdings’ (Ezion) stock price has performed very well in the past few months, rising more than 89% since early Jun. In comparison, the STI and the FTSE Oil and Gas Index have appreciated by about 9.6% and 6% respectively over the same period. YTD, Ezion is up about 99%. The good showing is mainly due to the clinching of contracts at attractive rates of return, smooth execution of projects, and commendable quarterly earnings.
What does 2013 hold?
As we expected last year, 2012 was no less eventful than 2011 for Ezion, which continued to secure liftboat and service rig contracts for work in various parts of the world, and embarked on new initiatives such as its proposed acquisition of YHM Group, as well as the roping in of industry veteran Mr. Tan Boy Tee. Unlike some of its SGX-listed peers, the group also did not serve up earnings disappointments in the past year. Looking ahead to 2013, we expect more news flow as additional assets are deployed, solidifying its earnings base.
1st O&M company to issue perpetual securities
The company also undertook a perpetual securities issue (S$125m of 7.8% subordinated perps) in Sep, becoming the first O&M company in Singapore to issue such securities. This projects the management’s strong sense of confidence in the company’s growth, while the good take-up of the securities reflected investors’ faith in earnings sustainability.
Broke the S$1b mark this year, ambitions for more
Ezion Holdings has been our small-mid cap pick since we highlighted it in our year-end strategy report last year, but after breaking the S$1b market cap mark this year, it is now better regarded as a mid-cap counter. Though 2012 has been a fantastic year, we believe that the best is yet to come, assuming no major change to its current operational status quo. Maintain BUY with S$1.70 fair value estimate.
Ezion Holdings’ (Ezion) stock price has performed very well in the past few months, rising more than 89% since early Jun. In comparison, the STI and the FTSE Oil and Gas Index have appreciated by about 9.6% and 6% respectively over the same period. YTD, Ezion is up about 99%. The good showing is mainly due to the clinching of contracts at attractive rates of return, smooth execution of projects, and commendable quarterly earnings.
What does 2013 hold?
As we expected last year, 2012 was no less eventful than 2011 for Ezion, which continued to secure liftboat and service rig contracts for work in various parts of the world, and embarked on new initiatives such as its proposed acquisition of YHM Group, as well as the roping in of industry veteran Mr. Tan Boy Tee. Unlike some of its SGX-listed peers, the group also did not serve up earnings disappointments in the past year. Looking ahead to 2013, we expect more news flow as additional assets are deployed, solidifying its earnings base.
1st O&M company to issue perpetual securities
The company also undertook a perpetual securities issue (S$125m of 7.8% subordinated perps) in Sep, becoming the first O&M company in Singapore to issue such securities. This projects the management’s strong sense of confidence in the company’s growth, while the good take-up of the securities reflected investors’ faith in earnings sustainability.
Broke the S$1b mark this year, ambitions for more
Ezion Holdings has been our small-mid cap pick since we highlighted it in our year-end strategy report last year, but after breaking the S$1b market cap mark this year, it is now better regarded as a mid-cap counter. Though 2012 has been a fantastic year, we believe that the best is yet to come, assuming no major change to its current operational status quo. Maintain BUY with S$1.70 fair value estimate.
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