Ezion Holdings (Ezion) reported a 80.9% YoY rise in revenue to S$67.2m and a 28.8% increase in net profit to S$36.2m in 2Q13, such that 1H13 net profit accounted for 55% of our full year estimates. Excluding a one-off disposal gain in 1Q13, core 1H13 net profit represented 49% of our full year estimates, in line with expectations. The group is proposing a bonus share issue of one bonus share for every five existing ordinary shares (book closure date to be determined). Looking ahead, the overall outlook of the company remains positive. We roll forward our valuations with an unchanged P/E of 12x (based on FY13/14F core earnings), which increases our fair value estimate to S$2.90 (prev. S$2.62). Do note that our fair value estimate will correspondingly drop to S$2.42 after adjusting for the proposed share bonus issue. Maintain BUY.
2Q13 net profit in line
Ezion Holdings (Ezion) reported a 80.9% YoY rise in revenue to S$67.2m and a 28.8% increase in net profit to S$36.2m in 2Q13, such that 1H13 net profit accounted for 55% of our full year estimates. Excluding a one-off disposal gain in 1Q13, core 1H13 net profit represented 49% of our full year estimates, in line with expectations. Gross margin remained strong at 46.3% in 2Q13 vs. 45.9% in 2Q12 and 44.9% in 1Q13.
One-for-five bonus share issue
Ezion is proposing a bonus share issue of one bonus share for every five existing ordinary shares (book closure date to be determined) to increase the accessibility of investing in the company to more investors and encourage trading liquidity by broadening its shareholder base. The impact will be a corresponding drop in share price following the bonus issue due to the increased number of shares outstanding.
Outlook is still positive
Looking ahead, more assets are expected to be deployed – five more liftboats/service rigs are expected to join the fleet in 2H13. There should also be more contributions from the APLNG and GLNG projects as well. We are expecting a particularly back-end loaded year, as most of the assets are to be deployed mainly in 4Q13. Margins may also improve slightly as certain chartered-in vessels are replaced by Ezion’s own newbuilds.
Higher FV of S$2.90 to drop to S$2.42 after bonus share issue
We roll forward our valuations with an unchanged P/E of 12x (based on FY13/14F core earnings), which increases our fair value estimate to S$2.90 (prev. S$2.62). Do note that our fair value estimate will correspondingly drop to S$2.42 after adjusting for the proposed share bonus issue. Maintain BUY.
Ezion Holdings (Ezion) reported a 80.9% YoY rise in revenue to S$67.2m and a 28.8% increase in net profit to S$36.2m in 2Q13, such that 1H13 net profit accounted for 55% of our full year estimates. Excluding a one-off disposal gain in 1Q13, core 1H13 net profit represented 49% of our full year estimates, in line with expectations. Gross margin remained strong at 46.3% in 2Q13 vs. 45.9% in 2Q12 and 44.9% in 1Q13.
One-for-five bonus share issue
Ezion is proposing a bonus share issue of one bonus share for every five existing ordinary shares (book closure date to be determined) to increase the accessibility of investing in the company to more investors and encourage trading liquidity by broadening its shareholder base. The impact will be a corresponding drop in share price following the bonus issue due to the increased number of shares outstanding.
Outlook is still positive
Looking ahead, more assets are expected to be deployed – five more liftboats/service rigs are expected to join the fleet in 2H13. There should also be more contributions from the APLNG and GLNG projects as well. We are expecting a particularly back-end loaded year, as most of the assets are to be deployed mainly in 4Q13. Margins may also improve slightly as certain chartered-in vessels are replaced by Ezion’s own newbuilds.
Higher FV of S$2.90 to drop to S$2.42 after bonus share issue
We roll forward our valuations with an unchanged P/E of 12x (based on FY13/14F core earnings), which increases our fair value estimate to S$2.90 (prev. S$2.62). Do note that our fair value estimate will correspondingly drop to S$2.42 after adjusting for the proposed share bonus issue. Maintain BUY.
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