DBS Equity Research: Ezion Holdings: A TOP O& G PICK: BUY Last Traded Price: S$1.10 Price Target : S$ 1.50 (37% upside)

Ezion Holdings: Buy EZI SP
A TOP O& G PICK
Last Traded Price: S$1.10 (STI : 3,300.96)
Price Target : S$ 1.50 (37% upside)

By: HO Pei Hwa +65 6682 3714 peihwa@dbs.com

AMS&rsquo s withdrawal of lawsuit eliminates a key overhang
We reiterate our conviction BUY on Ezion as we believe its stock price
would soon recover to the S$1.20 level, prior to the emergence of a dispute
with rig-operator partner Atlantic Marine Services (AMS), following AMS&rsquo s
withdrawal of its lawsuit against Ezion. 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&rsquo s management.

Rising liftboat demand drives growth
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/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, propelling earnings CAGR of 26% in
2015-2017.