SG: Ezion Holdings - S$1b company and growing

EZION HOLDINGS | BUY 14 Sep 2012

S$1B COMPANY AND GROWING - Good performance warranted - Upside still there - But recent run-up has been fast and furious The stock of Ezion Holdings (Ezion) has performed very well in the past few months, rising more than 75% since early Jun. This has been due to the clinching of contracts at attractive rates of return, smooth execution of projects, and commendable earnings. In addition, Ezion may be the first O&M company in Singapore to list perpetual securities, projecting management's strong sense of confidence in the company's growth. The proposed listing of Triyards and increased frequency of LNG-related news reports and conferences may have also helped sentiment. Ezion has been our small-mid cap pick since we highlighted it in our strategy report last year, but it should henceforth be better classified as a mid-cap counter. We roll forward our valuation with an unchanged peg of 9x FY13F earnings, increasing our fair value estimate from S$1.20 to S$1.53. Maintain BUY with a one-year horizon, but be cautious of a near-term pull back given the recent run-up.