Stock Name: Ezra
Company Name: EZRA HOLDINGS LIMITED
Company Name: EZRA HOLDINGS LIMITED
| Research House: OCBC | Price Call: BUY | Target Price: 1.48 |
Ezra Holdings | BUY 25 Sep 2012 |
PROGRESS ON ALL FRONTS - Higher subsea order wins estimate - Up fair value to S$1.48 - May drop to S$1.40 post Triyards listing As tendering activity in the subsea market continues to be buoyant and the industry outlook is set to remain positive, we increase our FY13 subsea new order wins estimate for Ezra Holdings to US$900m, increasing our fair value estimate from S$1.35 to S$1.48. At the same time, we are positive on the impending listing of Ezra's engineering and fabrication arm, Triyards, as this will allow the latter to tap the debt and equity capital markets independently from Ezra to pursue future growth opportunities. The move may also allow Ezra and Triyards to leverage on each other for business opportunities. Finally, an equity carve-out increases information transparency, improving investors' understanding of the parent's firm value. Assuming Triyards trades at 9x FY13F earnings with a share price of S$0.78, we estimate that this would lower our fair value estimate for Ezra from S$1.48 to S$1.40. Shareholders' approval still has to be sought at an EGM this week. Maintain BUY. |
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