- Results in line. Excluding one-off disposal gain of USD18m in 1H13, 1H14 PATMI rose 40% YoY to USD90.5m.
- Proposed 1-for-5 bonus issue.
- Maintain BUY. TP raised to SGD2.85 (SGD2.38 post-bonus issue) as we roll over to 11x FY15E P/E.
2Q14 PATMI of USD45.5m (+25% YoY, +1% QoQ) met expectations. Excluding disposal gain of USD18m in 1H13, 1H14 PATMI rose 40% YoY to USD90.5m. This forms 42% of our full-year forecast and 43% of consensus estimates. 18 liftboats contributed in 2Q14, with no additional units deployed (1Q14: 18, 2Q13: 13). We expect a stronger 2H14 with six more units to contribute. Ezion has proposed a 1-for-5 bonus share issue.
Our preferred pick within the sector
The six more liftboats expected in 2H14 will include four (units 9, 18, 24 and 27) whose delay was highlighted in 1Q14. The Caspian Sea unit (unit 18) should be deployed in the next few weeks after mounting of owner-furnished equipment. Teras Sunrise (unit 24), originally targeted for the North Sea, may have to take on a job for a year in Southeast Asia or the Middle East at lower day rates before seeking a European job. This should not derail Ezion’s long-term liftboat prospects. Further collaboration with Ausgroup in Australia could provide more catalysts.
We lower FY14E net profit by 4% but raise FY15E-16E by 4-13% for contract schedule and value adjustments. Maintain BUY with TP raised to SGD2.85 (from SGD2.70, post-bonus issue TP: SGD2.38) as we roll over to 11x FY15E P/E (from 13x FY14E P/E), equivalent to 1SD above its rolling P/E mean since Jan 2009. This is higher than the 9.5x average for comparable small-mid caps listed in Singapore but lower than the Singapore-listed large-cap average of 12.3x. We believe this is justified given Ezion’s superior three-year earnings CAGR of 34% and ROEs of 20%.
No comments:
Post a Comment