Here's a wrap-up of Ezion's stellar 2012 performance

A 76% profit surge is penciled in.

According to Maybank Kim Eng, Ezion had a spectacular FY12, announcing at least one new contract win a month for the first 11 months. FY13F would be the year which the research firm expects to see a 76% YoY leap in earnings as more charter contracts start to contribute.

At that kind of earnings level, it is trading at FY13F PER of 8.8x. Maybank says it believes that stock price would re-rate upwards as actual earnings and cashflows in FY13F confirm our positive expectations.

Here's more from Maybank Kim Eng:

We expect 2013 to be another year of strong contract wins which could see Ezion reach its optimal liftboat fleet size of about 30 by the end of the year.

Consensus has underestimated Ezion’s earnings potential by only factoring in secured contracts. We have however factored in expected contract wins of US0.8b for FY13F, which sent our FY14F earnings forecasts way ahead of the street.

Concerns on funding and financing would start to ease as cashflows start coming in from FY13F as it deploys more liftboat units. It has also roped in Kim Seng Holdings and Mr Tan Boy Tee as strategic partners.

Other than offering financing support, the partners provide strong operational support given their vast experience and network in the offshore industry. It was given another vote of confidence recently when EDB Investments (EDBI) decided to subscribe for shares in the company.

We also expect to see further clarity on its plans for YHM in 2013. This is the vehicle in which Ezion intends to use to carry out ancillary businesses related to its core liftboat/service rig business and provide further boost to its bottomline.

After a successful 2012 performance, Ezion remains a top pick in 2013 given the high quality of earnings from its liftboat units, which are backed by charter contracts from international oil majors. This supports our theme of focusing on players with secure earnings.

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