Monday, January 7, 2013

Ezra (technical)

Ezra: Technical Buy Call by UOB Kay Hian with $1.48 TP. House note that Ezra is a potential deepwater subsea turnaround play. Its new vessel, which will be delivered in 1H14, is considered a gamechanging asset with state-of-the-art capabilities to execute deepwater jobs. Since it is geared to take on bigger jobs, it could earn US$500m-1b per year. Should it secure its first contract in 1H13, this could be a major share price catalyst for Ezra. The subsea segment will be the key earnings growth driver for the co going forward. It accounted for 56% of FY12 turnover and management expects it to contribute an even bigger 70% in the future. House have a BUY call and TP of $1.53, based on 9.7x FY14F PE. The stock has attempted to break out at above $1.23. A successful breakout may see prices test $1.48 and effectively cover the gap that was created in Jul 11.

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