• Ezion Holdings’ 2Q18 core operating losses widened as revenue continued to slide; bottomline back to positive territory on fair value gains. 
• Gradual recovery from 3Q18 on higher utilisation. 
• Strategic partnership with China Merchant firmed up. 
• Reiterate BUY; Target Price S$0.21. 

BUY; Target Price Reduced to S$ 0.21

BUY; Target Price reduced to S$ 0.21 based on a lower target multiple of 1.0x on FY18 book value (vs 1.4x previously), given the slower-than-expected ramp up in utilisation and revenue. We now expect losses to narrow in 2H18 and move back into the black in 2019.

Nevertheless, we hold on to our belief that Ezion is poised to re-rate, catalysed by:

1. improving utilisation and day rates driving an earnings recovery; and
2. strategic partnership with China Merchant Group which brightens growth prospects.

Source: DBS Research - 10 Aug 2018