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Singapore : UOB raises Ezion target to S$1.42
Publish Date : 08-Jun-2012
UOB Kay Hian raised its price target on the stock of offshore services provider Ezion Holdings to S$1.42 from S$1.34 after the firm won a third service rig contract worth US$86.3 million.
Ezion shares were up 0.65 per cent at S$0.780 at 0145 GMT, outperforming the FT ST Small Cap Index, which was up 0.3 per cent. The stock has risen 19 per cent so far this year, outperforming a 6 per cent gain in the index.
The charter contract is for four years with total revenue at US$86.3 million or US$21.6 million per year, and UOB estimates the project to yield a net profit of US$7 million, adding 7 per cent to its 2013 and 2014 earnings forecast. The broker said the customer is Mexico\'s Pemex.
The project also has a \"very high\" return on equity (ROE) of 42 per cent, well above Ezion\'s minimum project ROE requirement of 30 per cent, said UOB and maintained its \'buy\' rating on the stock.
