1. business and industrial
2. company
3. earnings

Asia Pacific Equity Research
24 October 2014
Neutral
Ezra Holdings Ltd
Previous: Not Rated
A quarter of steady earnings but headwinds on subsea
outlook, gearing remain; reiterate Neutral rating
Price: S$0.83
EZRA.SI, EZRA SP
Following a period of restriction, we are moving from a Not Rated designation to
a Neutral rating and an August 2015 price target of S$0.75 (Neutral rating and
August 2014 S$0.90 price target prior to restriction).
 4Q14 and FY14 review; some improvement, but still early days: Earlier this
morning Ezra reported its 4Q14 and FY14 earnings, coming in at US$11
million and US$45.3 million, respectively, which was up 10% for the quarter
but down 16% for the year. On a recurring basis, FY14 earnings came in at
US$38 million. Overall, while this was a decent quarter with double-digit
recurring earnings profit at US$18 million (its highest level since 3Q12), we
continue to view the consensus estimate as too high (US$68 million) and cut
our FY15E earnings by 32% to US$49 million. We extend our PT of S$0.75 to
Aug-15 and reiterate our Neutral recommendation.
 Key takeaways from FY14 analyst briefing: (1) Guidance of ~US$150
million in capex annually as the bulk of capex is over as Constellation is in the
final stages of completion. (2) OSV G.P margins guidance into next year at
high-20% levels as FY14 was impacted by unplanned dockings while FY13’s
high “headline” OSV margins is due to sale and leaseback gains of US$29
million while subsea currently at 10% GP margins with 4Q14 subsea seeing
higher margins at 14-15%. (3) The company aims to add over the next few years
(a) 8-10 OSVs and, (b) 4 x accom vessels. (4) The company is targeting
improved operating cash flows and hopes to bring down its gearing to 0.7-0.8x
from 1.1x over the next two years. (5) The company is not seeing any weakness
in day rates but is seeing some impact on shallow-water AHTs. (6) Targeting
US$1 billion of orders in FY15E. (7) Constellation vessel is fully utilized until
early 2016 (the next job starting by April 2016) and, given that it is still an
uncompleted vessel, no depreciation is on the P&L yet. (8) High 80%+ OSV
utilization seen with >90% for AHTS while smaller PSVs and AHTs were lower
at 60-70%. (9) Subsea focus will be more on Africa and the US Gulf market.
Price Target: S$0.75
Singapore
Oil Services & Equipment
Ajay Mirchandani
AC
(65) 6882-2419
ajay.mirchandani@jpmorgan.com
Bloomberg JPMA MIRCHANDANI <GO>
J.P. Morgan Securities Singapore Private
Limited
Price Performance
1.3
S$ 1.1
0.9
0.7
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
EZRA.SI share price (S$)
FTSTI (rebased)
Abs
Rel
YTD
-37.1%
-39.0%
1m
-15.6%
-13.7%
3m
-29.1%
-26.0%
12m
-31.4%
-32.4%
 Ezra Holdings trades at 12.0x FY15E P/E and 0.5x FY15E P/BV.
Ezra Holdings Ltd (Reuters: EZRA.SI, Bloomberg: EZRA SP)
$ in mn, year-end Aug
FY12A
FY13A
FY14E
Revenue ($ mn)
984
1,262
1,488
Gross Profit ($ mn)
186
169
227
Gross Margin
18.9%
13.4%
15.2%
Net profit (reported) ($ mn)
65
54
45
Net Profit (recurring) ($ mn)
24
(39)
38
EPS (Recurring) ($)
0.02
(0.04)
0.04
P/E (Recurring)
26.8
NM
16.9
P/BV (x)
0.6
0.6
0.6
ROE
2.5%
(3.7%)
3.4%
Div Yield
0.0%
0.0%
0.0%
Net debt to equity
109.9%
97.2%
115.6%
Source: Company data, Bloomberg, J.P. Morgan estimates.
FY15E
1,585
255
16.1%
49
49
0.05
13.1
0.5
4.2%
0.0%
113.1%
FY16E
1,817
294
16.2%
62
62
0.06
10.2
0.5
5.2%
0.0%
110.7%
Company Data
Shares O/S (mn)
Market Cap ($ mn)
Market Cap ($ mn)
Price (S$)
Date Of Price
Free Float(%)
3M - Avg daily vol (mn)
3M - Avg daily val (S$ mn)
FTSTI
Exchange Rate
Price Target End Date
Price Target (S$)
979
636
636
0.83
24 Oct 14
3.70
3.57
3222.55
1.28
31-Aug-15
0.75
See page 7 for analyst certification and important disclosures, including non-US analyst disclosures.
J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that
the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single
factor in making their investment decision.
www.jpmorganmarkets.com
Asia Pacific Equity Research
24 October 2014
Ajay Mirchandani
(65) 6882-2419
ajay.mirchandani@jpmorgan.com
Key catalysts for the stock price:
• Order wins in the coming months
Upside risks to our view:
• Higher-than-expected order wins
• Higher margins from jobs
Downside risks to our view:
• Delay in orders could see steep fall in
earnings
• Execution risks: cost over-runs in new
markets
Key financial metrics
Revenues (US$ mn)
Revenue growth (%)
EBITDA (US$ mn)
EBITDA margin (%)
Tax rate (%)
Net profit (US$ mn)
EPS (S$ )
EPS growth (%)
DPS (S$)
BVPS (US$ )
Operating cash flow (US$ mn)
Free cash flow (US$ mn)
Interest cover (X)
Net margin (%)
Sales/assets (X)
Debt/equity (%)
Net debt/equity (%)
ROE (%)
Key model assumptions
Borrowing Cost
Gross Profit Margin
FY13A
1,262
28%
107
8%
31%
-39
FY14E
1,488
-3%
83
10%
28%
38
FY15E
1,585
44%
166
8%
17%
49
FY16E
1,817
44%
177
10%
17%
62
-0.04
-262%
0.04
-225%
0.05
63%
0.06
28%
0.00
1.11
-15
-264
0
-3%
0.46
112.6%
97%
-4%
FY13A
3.7%
13%
0.00
1.15
99
-228
2
3%
0.51
129.5%
116%
3%
FY14A
3.7%
15%
0.00
1.20
113
-29
2
5%
0.47
137.3%
113%
4%
FY15E
2.8%
16%
0.00
1.27
112
-51
3
3%
0.52
129.2%
111%
5%
FY16E
2.8%
16%
Valuation and price target basis
Our Aug-15 price target of S$0.75 is based on a P/E multiple of
12.0x, compared to subsea peers such as Technip, Saipem which
trade at an average P/E of 10.2x. We have ascribed a 20%
premium to Ezra to reflect its early stage positioning in the subsea
sector and longer-term growth potential alongside with it being
listed in Singapore.
FY13A revenue breakdown
17%
70%
Offshore support services
Marine engineering
Subsea Services
Source: Bloomberg, Company and J.P. Morgan estimates.
Sensitivity analysis
Sensitivity to
1% chg in borrowing cost
1% chg gross margin assumption
EBITDA
FY15E
0%
12%
13%
Source: Company data.
FY16E
0%
10%
EPS
FY15E
-7%
22%
JPMe vs. consensus, change in estimates
Net Income
JPMe old
JPMe new
% chg
Consensus
FY16E
-6%
29%
Source: J.P. Morgan estimates.
FY15E
72
49
-32%
69
FY16E
62
nm
92
Source: Bloomberg, J.P. Morgan.
Table 1: Valuations for companies under coverage
Company
Singapore
Keppel Corp
Sembcorp Marine
Ezion
Dyna-Mac
COSCO Corp
Malaysia
Bumi Armada
SapuraKencana
MMHE
Dialog
Perisai Petroleum
UMW Oil & Gas
Mkt Cap
(US$ mn)
Price
(LC)
FY14E
P/E
FY15E
FY14E
P/B
FY15E
Dividend Yield
FY14E
FY15E
FY14E
13,814
6,009
1,936
292
1,027
9.70
3.67
1.57
0.38
0.59
12.3x
12.6x
8.6x
13.0x
19.3x
12.0x
11.8x
7.6x
7.8x
19.3x
1.7x
2.6x
1.8x
2.0x
1.0x
2,744
6,595
1,238
2,362
416
2,168
1.63
3.54
2.26
1.67
1.06
3.44
14.8x
13.6x
18.1x
35.3x
38.3x
23.4x
12.1x
11.8x
16.9x
31.8x
10.5x
18.2x
1.5x
1.8x
1.5x
5.1x
1.2x
2.3x
ROE
FY15E
1.6x
2.4x
1.4x
1.9x
1.0x
5.2%
4.7%
17.3%
5.1%
3.4%
5.2%
5.2%
18.9%
7.7%
3.4%
14.2%
21.6%
22.7%
16.0%
4.3%
13.9%
21.5%
19.2%
22.9%
4.2%
1.3x
1.6x
1.4x
4.7x
1.1x
2.1x
1.2%
0.0%
1.2%
0.9%
n/a
0.3%
1.7%
0.0%
1.2%
1.3%
0.0%
0.6%
10.6%
14.2%
8.2%
15.8%
3.9%
10.4%
11.1%
14.3%
8.4%
16.5%
11.4%
11.7%
Source: Bloomberg, J.P. Morgan estimates. Prices as of 23 Oct 2014. SAKP’s year end is January, so FY14E and FY15E represent Jan 15E and Jan 16E, respectively. Dialog’s year end is June.
2
Asia Pacific Equity Research
24 October 2014
Ajay Mirchandani
(65) 6882-2419
ajay.mirchandani@jpmorgan.com
Table 2: Ezra's quarterly performance
US$ in millions, year-end August
4Q14
446.0
(382.7)
63.3
14%
(42.2)
9%
3.4
24.4
5%
1.0
(11.2)
0.0
2.7
0.0
17.0
(4.1)
24%
12.9
(1.9)
11.0
(7.2)
18.2
Revenue
COGS
Gross profit
G. P. margin (%)
SG&A
SG&A as % of revenues
Other operating income/(exp)
EBIT
EBIT margin (%)
Interest income
Interest expense
Other non-operating gains/(exp)
Share of associates/JV profit
Exceptionals
Profit before tax
Tax
Effective tax rate (%)
Profit after tax
Minority interests
Net profit
Exceptionals
Net profit (recurring)
4Q13
419.2
(344.3)
74.8
18%
(50.7)
12%
1.0
25.1
6%
1.2
(10.3)
0.0
5.7
0.0
21.7
(8.2)
38%
13.5
(3.5)
10.0
(4.0)
14.0
y/y
6%
11%
-15%
-17%
239%
-3%
-19%
8%
nm
-52%
nm
-22%
-51%
-5%
nm
10%
nm
30%
3Q14
402.1
(336.7)
65.4
16%
(45.7)
11%
0.4
20.1
5%
1.0
(10.4)
0.0
23.7
0.0
16.6
(6.4)
39%
10.2
(1.9)
8.3
(0.8)
9.1
q/q
11%
14%
-3%
-7%
779%
21%
-4%
8%
nm
-88%
nm
2%
-37%
26%
nm
33%
nm
100%
FY14E
1417.4
(1145.7)
271.7
19%
(177.2)
13%
0.0
94.5
7%
3.1
(52.2)
0.0
12.6
0.0
57.9
(9.8)
17%
48.1
0.1
48.2
0.0
48.2
FY14A
1488.4
(1261.4)
226.9
15%
(157.3)
11%
7.2
76.8
5%
3.6
(42.7)
0.0
36.9
0.0
74.6
(20.7)
28%
53.9
(8.8)
45.2
7.6
37.6
17.9% 17.1%
17.9%
FY13A
1262.1
(1092.8)
169.2
13%
(165.7)
13%
105.2
108.7
9%
5.0
(43.5)
0.0
22.1
0.0
92.3
(28.2)
31%
64.1
(10.4)
53.6
92.2
(38.5)
y/y
18%
15%
34%
-5%
-93%
-29%
-27%
-2%
nm
67%
nm
-19%
-27%
-16%
-16%
-16%
nm
-198%
Source: Company, J.P. Morgan calculations. *Recurring earnings do not exclude dividends paid to perpetual shareholders
Figure 1: Ezra’s quarterly gross margins
40.0%
35.0%
30.0%
29.2%
33.7%
31.6%
30.5% 29.8%
28.7%
25.3%
25.0%
20.0%
16.9%
15.0%
19.2%
14.2%
22.3%
16.2% 16.7%
14.9% 15.9% 16.3% 14.2%
10.0%
5.0%
0.7%
0.0%
4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14
Source: Company data
Figure 2: Ezra’s net debt / equity (%)
140%
120%
100%
80%
90%
89%
2Q11
3Q11
96%
104%
109%
102%
110%
91%
89%
1Q13
2Q13
101%
102%
108%
3Q13
4Q13
1Q14
112%
2Q14
119%
121%
3Q14
4Q14
69%
60%
40%
20%
0%
1Q11
4Q11
1Q12
2Q12
3Q12
4Q12
Source: Company data
3
Asia Pacific Equity Research
24 October 2014
Ajay Mirchandani
(65) 6882-2419
ajay.mirchandani@jpmorgan.com
Table 3: EMAS’ quarterly performance
US$ in millions, year-end August
Revenue
Cost of Sales
Gross Profit
Other Operating Income/(expenses)
Admin. Expenses
Profit from Operations (EBIT)
Financial Expenses
Financial Income
Share of Profit/(loss) of Associates
Share of Profit/(loss) of JV
PBT
Income tax
PAT
Minority Interests
PATMI
4Q14
14
(5)
9
(2)
(3)
4
(1)
1
4
0
8
0
8
(0)
8
4Q13
12
(6)
7
3
(3)
7
(2)
1
0
0
6
(0)
6
(0)
6
% change YoY
10%
-18%
32%
-156%
20%
-49%
-62%
22%
58714%
100%
30%
-328%
36%
-55%
36%
3Q14
10.8
(8)
3
(0)
(2)
0
(1)
1
4
0
4
(0)
4
(0)
4
% change QoQ
25%
-44%
237%
917%
37%
6857%
-20%
27%
-8%
0%
87%
-169%
110%
400%
110%
FY14A
47
(23)
24
34
(10)
48
2
(6)
15
0
60
(0)
60
0
60
FY 13A
43
(21)
23
4
(10)
17
2
(8)
1
0
12
(1)
11
0
11
(1)
5
14
12
2
(5)
(1)
(5)
(3)
10
12
10
2
7
6
2
-63%
-53%
10%
14%
-16%
-172%
-112%
-375%
(1)
1
11
10
1
5
6
(1)
7%
399%
25%
19%
97%
-213%
-112%
423%
(7)
55
47
40
7
43
41
2
(11)
27
43
39
4
17
12
5
D&A
EBITDA
Revenue by Segment
Construction
Production
EBIT
Construction
Production
YoY
9%
12%
6%
679%
-2%
188%
16%
-31%
1080%
-23%
410%
-70%
440%
nm
441%
nm
-34%
102%
9%
1%
98%
159%
244%
-65%
Source: Company data.
Table 4: Triyards’ quarterly performance
US$ in millions, year-end August
Revenue
Cost of Sales
Gross Profit
Other Income
Admin. Expenses
EBIT
Financial income
Financial
expenses
PBT
income tax
PAT
Depreciation
EBITDA
4Q14
48.8
(35.6)
13.2
0.2
(5.8)
7.5
0.0
4Q13
76.7
(62.3)
14.4
0.3
(2.4)
12.3
0.0
YoY
-36%
-43%
-9%
-43%
138%
-39%
-67%
3Q14
55.3
(42.8)
12.5
0.1
(4.3)
8.3
0.0
QoQ
-12%
-17%
6%
86%
37%
-9%
0%
(1.2)
6.3
(1.0)
5.3
(2.0)
9.6
(0.8)
11.5
(1.2)
10.3
(1.5)
13.8
54%
-45%
-13%
-49%
36%
-30%
(1.2)
7.1
(0.9)
6.3
(2.0)
10.3
5%
-12%
18%
-16%
2%
-7%
Source: Company data.
EMAS’ 4Q14 results
EMAS posted a 10% increase in revenue y/y mainly due to higher revenue contribution from Lewek Chancellor and
Lewek Conqueror due to the higher rate secured in new charters. The gross profit margin declined from 55% in 4Q13 to
34% in 4Q14.
Triyards’ 4Q14 results
Triyards posted 4Q14 net income of US$5.3 million vs US$10.3 million in 3Q14. Revenue declined by 36% y/y to US$5.3
million due to lower revenue recognized from two SEUs of BH450 series. However, the gross profit margin came in higher
at 27% this quarter vs 19% in 4Q13
4
Ajay Mirchandani
(65) 6882-2419
ajay.mirchandani@jpmorgan.com
Asia Pacific Equity Research
24 October 2014
Investment Thesis, Valuation and Risks
Ezra Holdings Ltd (Neutral; Price Target: S$0.75)
Investment Thesis
Ezra remains one of our least preferred offshore stocks in Singapore given (a)
continued earnings disappointments over the last 2-3 years, (b) poor track record of
its subsea earnings, (c) high gearing, and (d) high capex needs with negative free
cash flow profile.
Valuation
Our Aug-15 price target of S$0.75 is based on a P/E multiple of 12x compared to the
subsea peers like Technip, Saipem which trade at an average P/E of 10.2x. We have
ascribed a 20% premium to Ezra to reflect its early stage positioning in the subsea
sector and longer-term growth potential alongside with it being listed in Singapore.
Risks to Rating and Price Target
Key downside risks to our price target include 1) worse-than-expected margins from
subsea division; and 2) a deceleration of E&P activities. Upside risks include: (1)
Significant improvement in subsea profitability. 2) Better-than-expected OPM for its
OSV business. (3) Significant improvement in FCF reducing risk of equity raising in
the medium term.
5
Asia Pacific Equity Research
24 October 2014
Ajay Mirchandani
(65) 6882-2419
ajay.mirchandani@jpmorgan.com
Ezra Holdings Ltd: Summary of Financials
Income Statement
$ in millions, year end Aug
Revenues
% change Y/Y
Gross Margin
EBITDA
% change Y/Y
EBITDA Margin
EBIT
% change Y/Y
EBIT Margin
Net Interest
Earnings before tax
% change Y/Y
Tax
as % of EBT
Minority Interests
Net income (reported)
% change Y/Y
Shares outstanding
Fully Diluted EPS
Balance sheet
$ in millions, year end Aug
Cash and cash equivalents
Accounts receivable
Inventories
Others
Current assets
FY12
FY13
984
1,262
76.0% 28.2%
18.9% 13.4%
162
160
78.4% (1.4%)
16.4% 12.6%
116
109
79.8% (6.5%)
11.8%
8.6%
(35)
(39)
86
92
67.0%
6.7%
(22)
(28)
25.0% 30.6%
0
(10)
65
54
50.7% (17.4%)
978
979
0.07
0.05
FY12
133
478
89
353
1,054
FY13
176
508
75
331
1,090
LT investments
34
38
Net fixed assets
1,167
1,346
Total Assets
2,734
2,927
Short-term loans
606
501
Payables
342
349
Total current liabilities
1,026
961
Long-term debt
638
783
Other liabilities
58
43
Total Liabilities
1,723
1,787
Shareholders' equity
1,011
1,091
Total Liabilities and equity
2,734
2,927
BVPS
1.03
1.11
Net Debt
1,111
1,108
Source: Company reports and J.P. Morgan estimates.
6
FY14E
1,488
17.9%
15.2%
141
(11.8%)
9.5%
77
(29.4%)
5.2%
(39)
75
(19.1%)
(21)
27.7%
(9)
45
(15.8%)
979
0.05
FY15E
1,585
6.5%
16.1%
169
20.4%
10.7%
97
25.9%
6.1%
(41)
69
(7.8%)
(12)
17.0%
(9)
49
7.4%
979
0.05
FY16E
1,817
14.6%
16.2%
194
14.8%
10.7%
116
20.0%
6.4%
(41)
88
28.3%
(15)
17.0%
(11)
62
28.3%
979
0.06
FY14E FY15E FY16E
179
194
243
583
621
712
97
103
118
352
352
352
1,210 1,270 1,424
48
1,594
3,363
510
425
1,083
1,040
54
2,177
1,130
3,363
1.15
1,371
48
1,670
3,498
510
452
1,111
1,090
54
2,255
1,178
3,498
1.20
1,406
48
1,755
3,738
510
519
1,177
1,190
54
2,421
1,241
3,737
1.27
1,457
Cash flow statement
$ in millions, year end Aug
Profit before tax
Depreciation & amortization
Change in working capital
Other non-cash items
Cash flow from operations
Capex
Net Acquisitions
Cash flow from investments
Free cash flow
Equity raised/(repaid)
Debt raised/(repaid)
Other
Dividends paid
Cash flow from financing
Net change in cash
Beginning cash
Ending cash
DPS
Ratio Analysis
$ in millions, year end Aug
EBITDA margin
EBIT margin
Net margin
SG&A/Sales
a
Sales growth
EBIT growth
Net profit growth
Recurring EPS growth
Interest coverage (x)
Net debt to equity
FY12
86
45
(137)
(17)
(61)
(289)
(266)
(247)
FY13
92
58
(31)
(63)
(15)
(249)
(96)
(74)
95
251
(2)
0
344
17
116
133
0.00
0
146
(1)
0
145
40
133
173
0.00
FY12
16.4%
11.8%
2.4%
13.8%
FY13
12.6%
8.6%
(3.1%)
13.1%
FY14E FY15E
75
69
71
73
7
(17)
2
41
99
113
(327)
(143)
(331)
(143)
(191)
5
0
238
(1)
(5)
232
1
173
174
0.00
FY16E
88
78
(40)
41
112
(164)
(164)
(18)
0
50
0
0
50
21
174
194
0.00
0
100
0
0
100
49
194
243
0.00
FY14E FY15E
9.5% 10.7%
5.2%
6.1%
2.5%
3.1%
10.6% 10.0%
FY16E
10.7%
6.4%
3.4%
9.8%
76.0%
28.2%
17.9%
6.5% 14.6%
79.8%
(6.5%) (29.4%) 25.9% 20.0%
50.7% (17.4%) (15.8%)
7.4% 28.3%
10.6% (262.4%) (197.7%) 29.1% 28.3%
4.7
4.1
3.6
4.1
4.8
109.9%
97.2% 115.6% 113.1% 110.7%
a
Sales/assets
Assets/equity
ROE
ROCE
a
40.3%
262.7%
2.5%
4.3%
44.6%
269.2%
(3.7%)
3.3%
47.3% 46.2% 50.2%
283.2% 297.3% 299.1%
3.4%
4.2%
5.2%
2.2%
2.9%
3.4%
Asia Pacific Equity Research
24 October 2014
Ajay Mirchandani
(65) 6882-2419
ajay.mirchandani@jpmorgan.com
Analyst Certification: The research analyst(s) denoted by an “AC” on the cover of this report certifies (or, where multiple research
analysts are primarily responsible for this report, the research analyst denoted by an “AC” on the cover or within the document
individually certifies, with respect to each security or issuer that the research analyst covers in this research) that: (1) all of the views
expressed in this report accurately reflect his or her personal views about any and all of the subject securities or issuers; and (2) no part of
any of the research analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or views
expressed by the research analyst(s) in this report. For all Korea-based research analysts listed on the front cover, they also certify, as per
KOFIA requirements, that their analysis was made in good faith and that the views reflect their own opinion, without undue influence or
intervention.
Important Disclosures

Client: J.P. Morgan currently has, or had within the past 12 months, the following company(ies) as clients: Ezra Holdings Ltd.
Company-Specific Disclosures: Important disclosures, including price charts, are available for compendium reports and all J.P. Morgan–
covered companies by visiting https://jpmm.com/research/disclosures, calling 1-800-477-0406, or e-mailing
research.disclosure.inquiries@jpmorgan.com with your request. J.P. Morgan’s Strategy, Technical, and Quantitative Research teams may
screen companies not covered by J.P. Morgan. For important disclosures for these companies, please call 1-800-477-0406 or e-mail
research.disclosure.inquiries@jpmorgan.com.
Ezra Holdings Ltd (EZRA.SI, EZRA SP) Price Chart
6
OW S$4
5 OW S$6.3 OW S$4.6
N S$1
N S$0.9
N S$0.75OW S$3.05
N S$1.15
OW
OW OW
S$8.6
S$9.2 OW S$2.85
UW S$0.6OW S$2.4OW S$2.65
4 S$4.25
N S$1.35
NR
N S$1.15
Price(S$) 3
2
1
0
Oct
06
Apr
08
Oct
09
Apr
11
Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.
Initiated coverage Oct 09, 2006.
Oct
12
Apr
14
Date
Rating Share Price Price Target
(S$)
(S$)
09-Oct-06
OW
1.68
4.25
06-Feb-07 OW
2.65
6.30
27-Jun-07
OW
2.75
8.60
16-Oct-07
OW
3.45
9.20
11-Jan-08
OW
3.12
4.60
08-Apr-08
OW
2.41
4.00
19-Sep-08 OW
1.21
2.85
14-Jan-09
UW
0.76
0.60
08-Apr-09
N
0.80
0.75
08-Jul-09
N
1.15
1.00
16-Oct-09
OW
2.02
2.40
21-Jan-10
OW
2.35
3.05
16-Jul-10
OW
1.87
2.65
11-Jan-13
N
1.30
1.35
12-Apr-13
N
1.08
1.15
26-Jun-13
N
0.92
0.90
13-Jan-14
N
1.27
1.15
17-Jan-14
NR
1.12
--
The chart(s) show J.P. Morgan's continuing coverage of the stocks; the current analysts may or may not have covered it over the entire
period.
J.P. Morgan ratings or designations: OW = Overweight, N= Neutral, UW = Underweight, NR = Not Rated
Explanation of Equity Research Ratings, Designations and Analyst(s) Coverage Universe:
J.P. Morgan uses the following rating system: Overweight [Over the next six to twelve months, we expect this stock will outperform the
average total return of the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] Neutral [Over the next six to twelve
months, we expect this stock will perform in line with the average total return of the stocks in the analyst’s (or the analyst’s team’s)
coverage universe.] Underweight [Over the next six to twelve months, we expect this stock will underperform the average total return of
the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] Not Rated (NR): J.P. Morgan has removed the rating and, if
applicable, the price target, for this stock because of either a lack of a sufficient fundamental basis or for legal, regulatory or policy
reasons. The previous rating and, if applicable, the price target, no longer should be relied upon. An NR designation is not a
recommendation or a rating. In our Asia (ex-Australia) and U.K. small- and mid-cap equity research, each stock’s expected total return is
compared to the expected total return of a benchmark country market index, not to those analysts’ coverage universe. If it does not appear
in the Important Disclosures section of this report, the certifying analyst’s coverage universe can be found on J.P. Morgan’s research
website, www.jpmorganmarkets.com.
Coverage Universe: Mirchandani, Ajay: Aboitiz Power (AP.PS), Bumi Armada Berhad (BUAB.KL), COSCO Corporation (COSC.SI),
DMCI Holdings (DMC.PS), Dialog Group Bhd (DIAL.KL), Dyna-Mac Holdings Ltd (DMHL.SI), Electricity Generating Company
7
Ajay Mirchandani
(65) 6882-2419
ajay.mirchandani@jpmorgan.com
Asia Pacific Equity Research
24 October 2014
(EGCO.BK), Energy Development (EDC) Corporation (EDC.PS), Ezion Holdings Ltd (EZHL.SI), Ezra Holdings Ltd (EZRA.SI),
Glencore International PLC (0805.HK), Glow Energy (GLOW.BK), Icon Offshore Berhad (ICON.KL), Keppel Corporation (KPLM.SI),
Linc Energy Ltd (LINC.SI), Malaysia Marine and Heavy Engineering Holdings Bhd (MHEB.KL), Manila Electric Company (MER.PS),
Manila Water Company Inc (MWC.PS), Metro Pacific Investments Corp. (MPI.PS), PACC Offshore Services Holdings Ltd (PACC.SI),
Pacific Radiance Ltd. (PACI.SI), Perisai Petroleum Teknologi Bhd (PPTB.KL), Ratchaburi Electricity Generating Holding (RATC.BK),
SapuraKencana Petroleum Bhd (SKPE.KL), Sembcorp Marine (SCMN.SI), Semirara Mining Corp (SCC.PS), Tenaga (TENA.KL),
UMW Oil & Gas Corp Bhd (UMOG.KL), Vard Holdings Ltd (VARD.SI), YTL Power (YTLP.KL)
J.P. Morgan Equity Research Ratings Distribution, as of September 30, 2014
J.P. Morgan Global Equity Research Coverage
IB clients*
JPMS Equity Research Coverage
IB clients*
Overweight
(buy)
46%
57%
46%
76%
Neutral
(hold)
42%
49%
48%
67%
Underweight
(sell)
12%
34%
7%
51%
*Percentage of investment banking clients in each rating category.
For purposes only of FINRA/NYSE ratings distribution rules, our Overweight rating falls into a buy rating category; our Neutral rating falls into a hold
rating category; and our Underweight rating falls into a sell rating category. Please note that stocks with an NR designation are not included in the table
above.
Equity Valuation and Risks: For valuation methodology and risks associated with covered companies or price targets for covered
companies, please see the most recent company-specific research report at http://www.jpmorganmarkets.com, contact the primary analyst
or your J.P. Morgan representative, or email research.disclosure.inquiries@jpmorgan.com.
Equity Analysts' Compensation: The equity research analysts responsible for the preparation of this report receive compensation based
upon various factors, including the quality and accuracy of research, client feedback, competitive factors, and overall firm revenues.
Registration of non-US Analysts: Unless otherwise noted, the non-US analysts listed on the front of this report are employees of non-US
affiliates of JPMS, are not registered/qualified as research analysts under NASD/NYSE rules, may not be associated persons of JPMS,
and may not be subject to FINRA Rule 2711 and NYSE Rule 472 restrictions on communications with covered companies, public
appearances, and trading securities held by a research analyst account.
Other Disclosures
J.P. Morgan ("JPM") is the global brand name for J.P. Morgan Securities LLC ("JPMS") and its affiliates worldwide. J.P. Morgan Cazenove is a marketing
name for the U.K. investment banking businesses and EMEA cash equities and equity research businesses of JPMorgan Chase & Co. and its subsidiaries.
All research reports made available to clients are simultaneously available on our client website, J.P. Morgan Markets. Not all research content is
redistributed, e-mailed or made available to third-party aggregators. For all research reports available on a particular stock, please contact your sales
representative.
Options related research: If the information contained herein regards options related research, such information is available only to persons who have
received the proper option risk disclosure documents. For a copy of the Option Clearing Corporation's Characteristics and Risks of Standardized Options,
please contact your J.P. Morgan Representative or visit the OCC's website at http://www.optionsclearing.com/publications/risks/riskstoc.pdf
Legal Entities Disclosures
U.S.: JPMS is a member of NYSE, FINRA, SIPC and the NFA. JPMorgan Chase Bank, N.A. is a member of FDIC. U.K.: JPMorgan Chase N.A., London
Branch, is authorised by the Prudential Regulation Authority and is subject to regulation by the Financial Conduct Authority and to limited regulation by
the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from J.P. Morgan on
request. J.P. Morgan Securities plc (JPMS plc) is a member of the London Stock Exchange and is authorised by the Prudential Regulation Authority and
regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England & Wales No. 2711006. Registered Office 25
Bank Street, London, E14 5JP. South Africa: J.P. Morgan Equities South Africa Proprietary Limited is a member of the Johannesburg Securities
Exchange and is regulated by the Financial Services Board. Hong Kong: J.P. Morgan Securities (Asia Pacific) Limited (CE number AAJ321) is regulated
by the Hong Kong Monetary Authority and the Securities and Futures Commission in Hong Kong and/or J.P. Morgan Broking (Hong Kong) Limited (CE
number AAB027) is regulated by the Securities and Futures Commission in Hong Kong. Korea: J.P. Morgan Securities (Far East) Ltd, Seoul Branch, is
regulated by the Korea Financial Supervisory Service. Australia: J.P. Morgan Australia Limited (JPMAL) (ABN 52 002 888 011/AFS Licence No:
238188) is regulated by ASIC and J.P. Morgan Securities Australia Limited (JPMSAL) (ABN 61 003 245 234/AFS Licence No: 238066) is regulated by
ASIC and is a Market, Clearing and Settlement Participant of ASX Limited and CHI-X. Taiwan: J.P.Morgan Securities (Taiwan) Limited is a participant
of the Taiwan Stock Exchange (company-type) and regulated by the Taiwan Securities and Futures Bureau. India: J.P. Morgan India Private Limited
(Corporate Identity Number - U67120MH1992FTC068724), having its registered office at J.P. Morgan Tower, Off. C.S.T. Road, Kalina, Santacruz - East,
Mumbai – 400098, is a member of the National Stock Exchange of India Limited (SEBI Registration Number - INB 230675231/INF 230675231/INE
230675231) and Bombay Stock Exchange Limited (SEBI Registration Number - INB 010675237/INF 010675237) and is regulated by Securities and
Exchange Board of India. Telephone: 91-22-6157 3000, Facsimile: 91-22-6157 3990 and Website: www.jpmipl.com. For non local research reports, this
material is not distributed in India by J.P. Morgan India Private Limited. Thailand: This material is issued and distributed in Thailand by JPMorgan
Securities (Thailand) Ltd., which is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and
8
Ajay Mirchandani
(65) 6882-2419
ajay.mirchandani@jpmorgan.com
Asia Pacific Equity Research
24 October 2014
Exchange Commission and its registered address is 3rd Floor, 20 North Sathorn Road, Silom, Bangrak, Bangkok 10500. Indonesia: PT J.P. Morgan
Securities Indonesia is a member of the Indonesia Stock Exchange and is regulated by the OJK a.k.a. BAPEPAM LK. Philippines: J.P. Morgan Securities
Philippines Inc. is a Trading Participant of the Philippine Stock Exchange and a member of the Securities Clearing Corporation of the Philippines and the
Securities Investor Protection Fund. It is regulated by the Securities and Exchange Commission. Brazil: Banco J.P. Morgan S.A. is regulated by the
Comissao de Valores Mobiliarios (CVM) and by the Central Bank of Brazil. Mexico: J.P. Morgan Casa de Bolsa, S.A. de C.V., J.P. Morgan Grupo
Financiero is a member of the Mexican Stock Exchange and authorized to act as a broker dealer by the National Banking and Securities Exchange
Commission. Singapore: This material is issued and distributed in Singapore by or through J.P. Morgan Securities Singapore Private Limited (JPMSS)
[MCI (P) 199/03/2014 and Co. Reg. No.: 199405335R] which is a member of the Singapore Exchange Securities Trading Limited and is regulated by the
Monetary Authority of Singapore (MAS) and/or JPMorgan Chase Bank, N.A., Singapore branch (JPMCB Singapore) which is regulated by the MAS. This
material is provided in Singapore only to accredited investors, expert investors and institutional investors, as defined in Section 4A of the Securities and
Futures Act, Cap. 289. Recipients of this document are to contact JPMSS or JPMCB Singapore in respect of any matters arising from, or in connection
with, the document. Japan: JPMorgan Securities Japan Co., Ltd. is regulated by the Financial Services Agency in Japan. Malaysia: This material is issued
and distributed in Malaysia by JPMorgan Securities (Malaysia) Sdn Bhd (18146-X) which is a Participating Organization of Bursa Malaysia Berhad and a
holder of Capital Markets Services License issued by the Securities Commission in Malaysia. Pakistan: J. P. Morgan Pakistan Broking (Pvt.) Ltd is a
member of the Karachi Stock Exchange and regulated by the Securities and Exchange Commission of Pakistan. Saudi Arabia: J.P. Morgan Saudi Arabia
Ltd. is authorized by the Capital Market Authority of the Kingdom of Saudi Arabia (CMA) to carry out dealing as an agent, arranging, advising and
custody, with respect to securities business under licence number 35-07079 and its registered address is at 8th Floor, Al-Faisaliyah Tower, King Fahad
Road, P.O. Box 51907, Riyadh 11553, Kingdom of Saudi Arabia. Dubai: JPMorgan Chase Bank, N.A., Dubai Branch is regulated by the Dubai Financial
Services Authority (DFSA) and its registered address is Dubai International Financial Centre - Building 3, Level 7, PO Box 506551, Dubai, UAE.
Country and Region Specific Disclosures
U.K. and European Economic Area (EEA): Unless specified to the contrary, issued and approved for distribution in the U.K. and the EEA by JPMS plc.
Investment research issued by JPMS plc has been prepared in accordance with JPMS plc's policies for managing conflicts of interest arising as a result of
publication and distribution of investment research. Many European regulators require a firm to establish, implement and maintain such a policy. This
report has been issued in the U.K. only to persons of a kind described in Article 19 (5), 38, 47 and 49 of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (all such persons being referred to as "relevant persons"). This document must not be acted on or relied on by persons
who are not relevant persons. Any investment or investment activity to which this document relates is only available to relevant persons and will be
engaged in only with relevant persons. In other EEA countries, the report has been issued to persons regarded as professional investors (or equivalent) in
their home jurisdiction. Australia: This material is issued and distributed by JPMSAL in Australia to "wholesale clients" only. This material does not take
into account the specific investment objectives, financial situation or particular needs of the recipient. The recipient of this material must not distribute it to
any third party or outside Australia without the prior written consent of JPMSAL. For the purposes of this paragraph the term "wholesale client" has the
meaning given in section 761G of the Corporations Act 2001. Germany: This material is distributed in Germany by J.P. Morgan Securities plc, Frankfurt
Branch and J.P.Morgan Chase Bank, N.A., Frankfurt Branch which are regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht. Hong Kong: The
1% ownership disclosure as of the previous month end satisfies the requirements under Paragraph 16.5(a) of the Hong Kong Code of Conduct for Persons
Licensed by or Registered with the Securities and Futures Commission. (For research published within the first ten days of the month, the disclosure may
be based on the month end data from two months prior.) J.P. Morgan Broking (Hong Kong) Limited is the liquidity provider/market maker for derivative
warrants, callable bull bear contracts and stock options listed on the Stock Exchange of Hong Kong Limited. An updated list can be found on HKEx
website: http://www.hkex.com.hk. Japan: There is a risk that a loss may occur due to a change in the price of the shares in the case of share trading, and
that a loss may occur due to the exchange rate in the case of foreign share trading. In the case of share trading, JPMorgan Securities Japan Co., Ltd., will be
receiving a brokerage fee and consumption tax (shouhizei) calculated by multiplying the executed price by the commission rate which was individually
agreed between JPMorgan Securities Japan Co., Ltd., and the customer in advance. Financial Instruments Firms: JPMorgan Securities Japan Co., Ltd.,
Kanto Local Finance Bureau (kinsho) No. 82 Participating Association / Japan Securities Dealers Association, The Financial Futures Association of Japan,
Type II Financial Instruments Firms Association and Japan Investment Advisers Association. Korea: This report may have been edited or contributed to
from time to time by affiliates of J.P. Morgan Securities (Far East) Ltd, Seoul Branch. Singapore: JPMSS and/or its affiliates may have a holding in any of
the securities discussed in this report; for securities where the holding is 1% or greater, the specific holding is disclosed in the Important Disclosures
section above. Taiwan: This material is issued and distributed in Taiwan by J.P. Morgan Securities (Taiwan Limited). India: For private circulation only,
not for sale. Pakistan: For private circulation only, not for sale. New Zealand: This material is issued and distributed by JPMSAL in New Zealand only to
persons whose principal business is the investment of money or who, in the course of and for the purposes of their business, habitually invest money.
JPMSAL does not issue or distribute this material to members of "the public" as determined in accordance with section 3 of the Securities Act 1978. The
recipient of this material must not distribute it to any third party or outside New Zealand without the prior written consent of JPMSAL. Canada: The
information contained herein is not, and under no circumstances is to be construed as, a prospectus, an advertisement, a public offering, an offer to sell
securities described herein, or solicitation of an offer to buy securities described herein, in Canada or any province or territory thereof. Any offer or sale of
the securities described herein in Canada will be made only under an exemption from the requirements to file a prospectus with the relevant Canadian
securities regulators and only by a dealer properly registered under applicable securities laws or, alternatively, pursuant to an exemption from the dealer
registration requirement in the relevant province or territory of Canada in which such offer or sale is made. The information contained herein is under no
circumstances to be construed as investment advice in any province or territory of Canada and is not tailored to the needs of the recipient. To the extent that
the information contained herein references securities of an issuer incorporated, formed or created under the laws of Canada or a province or territory of
Canada, any trades in such securities must be conducted through a dealer registered in Canada. No securities commission or similar regulatory authority in
Canada has reviewed or in any way passed judgment upon these materials, the information contained herein or the merits of the securities described herein,
and any representation to the contrary is an offence. Dubai: This report has been issued to persons regarded as professional clients as defined under the
DFSA rules. Brazil: Ombudsman J.P. Morgan: 0800-7700847 / ouvidoria.jp.morgan@jpmorgan.com.
General: Additional information is available upon request. Information has been obtained from sources believed to be reliable but JPMorgan Chase & Co.
or its affiliates and/or subsidiaries (collectively J.P. Morgan) do not warrant its completeness or accuracy except with respect to any disclosures relative to
JPMS and/or its affiliates and the analyst's involvement with the issuer that is the subject of the research. All pricing is as of the close of market for the
securities discussed, unless otherwise stated. Opinions and estimates constitute our judgment as of the date of this material and are subject to change
without notice. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any
financial instrument. The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and are not
9
Ajay Mirchandani
(65) 6882-2419
ajay.mirchandani@jpmorgan.com
Asia Pacific Equity Research
24 October 2014
intended as recommendations of particular securities, financial instruments or strategies to particular clients. The recipient of this report must make its own
independent decisions regarding any securities or financial instruments mentioned herein. JPMS distributes in the U.S. research published by non-U.S.
affiliates and accepts responsibility for its contents. Periodic updates may be provided on companies/industries based on company specific developments or
announcements, market conditions or any other publicly available information. Clients should contact analysts and execute transactions through a J.P.
Morgan subsidiary or affiliate in their home jurisdiction unless governing law permits otherwise.
"Other Disclosures" last revised October 18, 2014.
Copyright 2014 JPMorgan Chase & Co. All rights reserved. This report or any portion hereof may not be reprinted, sold or
redistributed without the written consent of J.P. Morgan. #$J&098$#*P
10