Ezion’s share price plunged 42% from peak with investors spooked over deployment delays

It’s laying its bets on liftboats.

Investors jittery over potential deployment delays have caused Ezion’s share price to plunge 42% from its peak of $2.02, a report by Maybank Kim Eng revealed.

However, the report noted that Ezion has the strongest visibility and stability among the offshore players, especially as liftboats may soon lay claim to other offshore roles.

“We expect Ezion to secure at least two liftboat contracts in 1Q15, going by industry newsflow. Our confidence was lately reinforced by signs of positive regional demand for liftboats despite oil’s rout. Modern liftboats may start to contend for other offshore jobs, thanks to their improved capabilities, versatility and efficiency,” stated Maybank Kim Eng.

Here’s more from the report:

Ezion is our top sector pick. We believe its 42% slide from its peak of SGD2.02 has priced in prior concerns of deployment delays.

Among asset owners under coverage, it arguably offers the strongest FY15E-16E job visibility and earnings resilience on strong contract coverage and exposure to more-stable maintenance demand.

We understand most of the five vessels that are due for renewal this year can be recontracted at similar or higher rates.

We see upside from potential new contracts, as opposed to risks for the rest of our stocks. Such near-term catalysts do not hinge on an oil-price recovery.

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