Brokers' take

Ezion Holdings | Buy

June 22 close: S$1.09

Target price: S$1.50

DBS Group Research, June 22

FOLLOWING rig-operator partner Atlantic Marine Services (AMS)'s withdrawal of its lawsuit against Ezion, we believe Ezion's stock price would soon recover to the S$1.20 level, prior to the emergence of a dispute with AMS. It is a win-win situation that both companies are now looking to continue the partnership in the North Sea after a change in AMS's management.

Ezion is well-positioned to benefit from the rising popularity of liftboats in this region, capitalising on its first-mover advantage. We believe service rigs are in an early growth phase, buoyed by the substitution effect to replace typical work boats or barges in this region. Ezion has taken delivery of 22 service rigs and the fleet is expected to grow to 33 units by end of 2015, and 37 units by 2016, prope…