SG: Ezion Holdings - Strong FY11 results in line

EZION HOLDINGS 22 Feb 2012

Strong FY11 results in line - Results within expectations - Clinches service rig contract for Myanmar - Fund raising in the pipeline? Ezion Holdings (Ezion) reported a 8.7% fall in revenue to US$107.0m but a 44.6% increase in net profit to US$58.1m in FY11, accounting for 100.2% and 100.7% of our full year estimates, respectively. Ezion has also clinched its fourth service rig contract worth up to US$118m from a European-based customer, which is likely to be Total S.A. We estimate a decent ROE of 25-30% for this project. Management is optimistic about opportunities in the service rig and logistics segments, and given the amount of potential work that may come up, there is a possibility of a fund raising. Meanwhile, we roll over our valuation to 10x FY12F earnings and as such our fair value estimate rises to S$1.18 (prev. S$0.97). Maintain BUY.