Brokers' take

Ezion Holdings | Add

Aug 17 close: S$0.66

Target price: S$1.30

CIMB Research, Aug 16

Ezion has built up rapidly over the past two to three years, amassing an asset base of over US$2 billion. However, this came at the cost of its foundations, which may not be deep enough. We believe that Q2 and FY15 results reflect Ezion getting its house in order. At 36 per cent of our FY15 forecast, Ezion's H1 FY15 core net profit of US$70 million (-23 per cent year-on-year) was below our expectations and consensus. Q2 FY15 was marred by cost overruns and rejigging of its fleet, and we expect the effects to ripple through Q3. We shave FY15-17 earnings per share by 10-29 per cent as we factor in the earnings miss, tweak our fleet deployment assumptions and temper Australian contributions. We also lower our margin assumptions as Ezion shifts to operatorship (i…