SG: MARKET PULSE: STX OSV, Midas, Ezra (15 Mar 2013)

Stock Name: STXOSV
Company Name: STX OSV HOLDINGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 1.52

Stock Name: MIDAS
Company Name: MIDAS HLDGS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 0.595

Stock Name: Ezra
Company Name: EZRA HOLDINGS LIMITED

Research House: OCBC

Price Call: HOLD

Target Price: 1.30

MARKET PULSE: STX OSV, Midas, Ezra

15 Mar 2013

KEY IDEA STX OSV: What's next after offer closing? At the close of its mandatory offer for STX OSV shares on 13 Mar 2013, Fincantieri received only 4.88% valid acceptances, bringing its total shareholdings to 55.63% (pre-offer: 50.75%). The low acceptance level is unsurprising given that the Board of Directors has recommended shareholders to reject Fincantieri's offer as it is not compelling enough. Looking ahead, we believe there will be better clarity in terms of corporate identity, board leadership and senior management. Fincantieri has also stated that it has no intention to (i) introduce any major changes to STX OSV, (ii) re-deploy the fixed assets or (iii) discontinue the employment of its employees. Maintain BUY with unchanged S$1.52 fair value estimate. (Chia Jiunyang) MORE REPORTS Midas Holdings: Seeking to grow its order book We view China's latest railway reforms as a mid-to-long term positive for the sector, which would likely benefit industry suppliers such as Midas Holdings (Midas). While we are cognisant that there may be some near-term uncertainties over the timeline of new high-speed railway (HSR) contract tenders, we note that the Chinese government has reaffirmed its railway investment targets for 2013. Its 12thFive-Year Plan for the sector also remains unchanged. Meanwhile, Midas recently won CNY109.6m worth of metro contracts in China. We expect management to continue its drive to secure more orders from the metro/subway, international rail transport, power and industrial machinery industries to act as a near-term buffer for the lack of clarity on when the resumption of HSR contract tenders would materialise. Reiterate BUY and S$0.595 fair value estimate on Midas, still pegged to 1.2x FY13F P/B. (Wong Teck Ching Andy) Ezra Holdings: Wins two contracts for the Norwegian sea Ezra Holdings (Ezra) announced that its subsea services division, EMAS AMC, has won an engineering, procurement, construction and installation (EPCI) contract valued at about US$165 million from Det norske oljeselskap ASA. This is the same customer that awarded Sembcorp Marine a S$900m EPC contract for an offshore platform topside in Feb this year. Ezra will undertake rigid pipe-lay and related subsea work, in the Ivar Aasen field in the Norwegian North Sea. Project management and engineering work will start immediately with offshore activities in 2015. Meanwhile EMAS AMC has also won a contract (value undisclosed) from Statoil for the transport and installation of subsea templates for the Aasta Hansteen field in the Norwegian Sea. Offshore transport and installation will take place in 2015. Pending more details on the second contract, we maintain our HOLD rating and fair value estimate of S$1.30 on Ezra. (Low Pei Han)

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