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STOCKS NEWS SINGAPORE-Brokers bullish on Ezion
April 5, 2012 / 3:17 AM / 5 years ago

STOCKS NEWS SINGAPORE-Brokers bullish on Ezion

Brokers are upbeat about Ezion Holdings Ltd after a slew of orders, the latest an $80 million contract over four years to provide a service rig to a major energy company for its oil and gas activities in Latin America.

Singapore’s offshore and marine sector has seen a strong flow of orders since late last year as oil companies boost capital spending, encouraged by persistently high oil prices.

Ezion shares were up 1.5 percent at S$1.015 and have risen more than 50 percent so far this year.

While Ezion did not disclose the name of the customer, OCBC Investment Research said it is likely to be Mexican state oil company Pemex.

OCBC estimated the return on equity (ROE) for the project to be around 34 percent, higher than Ezion’s overall ROE of about 22 percent. OCBC raised its share price target on Ezion to S$1.21 from S$1.05 and maintained its buy rating.

DMG & Partners Securities said the new contract is expected to add $5 million per year to Ezion’s bottom line from 2013 onwards. The company is pursuing more service rig orders, especially in Asia, Africa and Central America, it said.

DMG has a buy rating and a S$1.25 target price on Ezion stock.

Over the past month, the average upward revision in analysts’ revenue estimates for Ezion’s financial year ending December 2013 was 7.4 percent, according to StarMine data.

1054 (0254 GMT)

(Reporting by Eveline Danubrata in Singapore; eveline.danubrata@thomsonreuters.com)

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9:51 STOCK NEWS SINGAPORE-CIMB ups target on Sembcorp Marine

CIMB Research raised its price target on Sembcorp Marine Ltd , the world’s second-largest rig builder, to S$6.32 from S$6.28 and maintained its outperform rating.

On Thursday, Sembcorp said its PPL Shipyard unit secured a $218.5 million contract to build a jack-up rig.

Sembcorp’s spare capacity had helped the yard to clinch the rig contract, which offers superior margins, CIMB said, adding that Sembcorp still had capacity for one or two more projects for 2013 delivery.

“We increase our non-Petrobras contract assumption to S$2.5 billion from S$2 billion in view of the recent rush in orders,” CIMB said in a report.

“We are expecting further frenzy in rig ordering in the next few months, especially for harsh-environment equipment and ultra-deepwater drilling rigs, which will benefit the builders.”

Sembcorp’s shares were flat at S$5.2, while shares in rival Keppel Corp Ltd, the world’s largest rig builder, were also little changed. Sembcorp’s shares have gained 37 percent so far this year, while Keppel is up 17 percent.

0945 (0145 GMT)

(Reporting by Eveline Danubrata in Singapore; eveline.danubrata@thomsonreuters.com)

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8:38 STOCK NEWS SINGAPORE-Singapore index futures flat

Singapore index futures were flat on Thursday, indicating a lacklustre start for the benchmark Straits Times Index.

Seoul and Tokyo shares opened lower on Thursday, weighed down by a weak Spanish debt auction and dashed hopes of further U.S. stimulus. The Korea Composite Stock Price Index (KOSPI) was down 0.4 percent, while the Nikkei shed 0.8 percent.

0837 (0037 GMT)

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