SG: MARKET PULSE: Ezion Holdings, KSH Holdings (22 Mar 2013)

Stock Name: EzionHldg
Company Name: EZION HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 2.35

Stock Name: KSH Hldg
Company Name: KSH HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.61

MARKET PULSE: Ezion Holdings, KSH Holdings

22 Mar 2013

KEY IDEA Ezion Holdings: Secures service rig contract with good ROE Ezion Holdings (Ezion) announced that it has secured a charter contract worth about US$48.2m over a three year period to provide a service rig for an international oil and gas major for work in the Arabian Gulf. The unit will be deployed before end 2013 after refurbishment and upgrading in a Middle Eastern yard. We estimate a good ROE of slightly more than 55% for this project, vs a forecasted ROE of 22% for Ezion in FY13. Ezion's stock price has appreciated by about 18% YTD vs the STI's 3% rise over the same period. However, we still see an upside potential of more than 15% over a one-year time frame. We tweak our earnings estimates, and based on 12x blended FY13/14F core earnings, our fair value estimate rises from S$2.33 to S$2.35. Maintain BUY. (Low Pei Han) MORE REPORTS KSH Holdings: Placement exercise to raise S$13.9m KSH recently conducted a placement for 30.9m new shares and 4.1m existing treasury shares at 40.8 S-cents per share. This was at a 5.2% discount to the weighted average traded price of 43.0 S-cents on 11 Mar 2013 and raised S$13.9m of capital for the group. Shortly after the placement, KSH deployed S$1.9m to increase its stake in its Beijing condominium project (Liang Jing Ming Ju, Phase 4) from 26.24% to 45.00%. Pending further visibility on capital deployment, we are overall neutral on this placement but note it would increase the size of the public float and possibly improve the counter's trading liquidity, which has been low historically. Maintain BUY on KSH. Our fair value estimate dips mildly to S$0.61 from S$0.62, due to a mild dilution effect, but our forecast for buoyant earnings growth over FY13-14 remains unchanged. (Eli Lee)

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