Offshore & Marine│Singapore July 31, 2014

Ezion Holdings

2QFY14 RESULTS NOTE

EZI SP / EZHL.SI

Market Cap

Avg Daily Turnover

US$2,229m

US$9.70m

S$2,775m

S$12.10m

Free Float

70.8%

1,185 m shares

Current

S$2.11

Target

S$2.41

Prev. Target

S$2.48 14.2%

Up/Downside Conviction|

|

Shifting into higher gear

CIMB Analyst(s)

—————————————————————————————————————————

YEO Zhi Bin

T (65) 6210 8669 E [email protected]

At 44% of our FY14 forecast, 1H14 core net profit of US$45.4m (+25% yoy) was in line with our expectations and consensus. We anticipate a stronger 2H, with the contributions of six additional liftboats/service rigs. We trim our FY14 EPS by 2% as we conservatively remove contributions from the Endeavour service rig and our FY15 EPS by 5% as we reduce our day rate assumption for the Sunrise liftboat. This lowers our target price, based on a blend of P/E and P/BV. Maintain Add with re-rating catalysts from earnings strength and order wins.

2QFY14 highlights: smooth sailing

Share price info Share price perf. (%)

1M

3M

12M

Relative

-1.6

-9.8

8.7

Absolute

1.4

-7.1

12

Major shareholders

% held

Chew Thiam Keng Franklin Resources Fidelity Management & Research

14.3 6.1 4.6

Show Style "View Doc Map"

We view 2QFY14 as a smooth quarter. As there was no additional deployment of service rigs/liftboats in 2Q, both revenue and earnings were flat qoq. Ezion generated strong operating cash of US$66.6m (~74% of 1H earnings). This, combined with the issuance of new shares to Tan Sri Quek Leng Chang (proceeds of ~US$155m), brought down net gearing to 1x (end-FY13: 1.15x).

Shifting into higher gear

Given the three additional units each expected in 3Q and 4Q, we forecast 2H14 net profit to be 24% higher than 1H14. We expect liftboat 13 (Yellow Sea), service rig 18 (Caspian Sea) and service rig 27 (Indonesia) to come on stream in 3Q, while liftboat 9 (Indonesia), liftboat 17 (Europe) and liftboat Sunrise begins contributing in 4Q. We now expect Sunrise to be contracted on short-term jobs in Southeast Asia/Middle East until end-FY15, when it embarks on a longer-term contract in the North Sea. We expect the unit to earn bareboat day rates of US$45,000 in Southeast Asia/Middle East, in line with Ezion’s typical liftboats. We project that Sunrise’s day rates will be 50% higher when it works in the North Sea. In addition, we forecast that Ezion will book a disposal gain of US$55m from the proposed disposal of its marine supply base business to Ausgroup (AUSG SP, Not Rated). If the transaction materialises, it will have the positive effect of freeing up Ezion’s balance sheet and management time, while still allowing the company to enjoy the Port Melville’s potential. Ezion has also proposed a 1-for-5 bonus share issue.

Recall the reason that we liked Ezion in the first place

In our view, Ezion is able to generate high earnings growth and returns due to management’s ability to connect the dots. Drawing on its technical expertise in modifying the liftboat concept to suit Southeast Asian conditions (in a cost-competitive manner), management is able to secure lucrative contracts, with growing traction among the national oil companies (NOCs) in the region, and enhance returns with its financial savvy. This has not changed. Results Comparison

FYE Dec (US$ m)

2Q

2Q

yoy %

Revenue Operating costs EBITDA

FY14 92.6 (26.2) 66.5

FY13 67.2 (27.5) 39.8

chg 37.8 (4.7) 67.2

chg (1.9) (8.7) 1.1

Cum 187.1 (54.8) 132.2

Cum 122.0 (52.0) 70.0

chg 53.3 5.4 88.8

FY14F 485.2 (200.9) 284.3

EBITDA margin (%) Depn & amort. EBIT Interest expense Interest & invt inc Associates' contrib Exceptionals Pretax profit

71.7 (24.4) 42.0 (5.4) 1.6 7.9 46.2

59.1 (10.3) 29.4 (3.1) 1.4 9.1 (0.0) 36.7

136.0 43.0 73.0 16.1 (12.5) (100.0) 25.8

7.2 (2.2) 6.1 5.2 27.6 na 1.2

70.7 (47.2) 85.0 (10.6) 3.2 14.2 91.8

57.4 (16.7) 53.3 (6.4) 2.3 16.8 17.7 83.8

182.2 59.5 65.5 35.0 (15.4) (100.0) 9.6

58.6 (80.5) 203.8 (20.0) 5.5 26.7 10.2 226.1

Above Above In line, in line with EBITDA In line Above Above

(0.8) 1.7 45.4 3.5 45.4

(0.5) 1.3 36.2 3.0 36.3

69.1

0.4 (4.4) 0.4

(1.2) 1.3 90.6 7.2 90.6

(1.4) 4.4 82.4 7.0 64.9

10.0 3.2 39.5

(2.3) 1.0 223.9 17.9 206.0

Above

25.2 16.9 25.1

3.5

3.0

16.8

(4.4)

7.2

5.5

30.9

16.5

Tax Tax rate (%) Minority interests Net profit FD EPS (US cts) Core profit FD Core EPS (US cts)

qoq % 2QFY14 2QFY13

86.5

yoy %

(10.6)

Prev. Comments Below, lower-than-expected contrib from a service rig proj Below, in line with lower revenue In line, higher gross margins more than offset lower revenue

In line, in line with EBIT

0.00% In line In line In line In line, 1H forms 44% of our FY14. 2Q at 22%

SOURCE: CIMB, COMPANY REPORTS

The CIMB Stock Selection Tools (SST) are designed to complement and enhance the investment decision making process. The SST incorporate a range of analytical tools, providing ready access to key company and market data, valuation tools and charts. If you are interested in subscribing to the 'Stock Selection Tools', please contact your CIMB account manager. IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. EFACustomEntityStatement|

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Offshore & Marine│Ezion Holdings July 31, 2014

Price Close

Relative to FSSTI (RHS)

2.50

136.0

2.30

126.0

2.10

116.0

1.90

106.0

1.70 40

96.0

30

Vol m

20 10 Jul-13

Oct-13

Jan-14

May-14

Source: Bloomberg

52-week share price range

2.11 2.43

1.80

Current

Target

2.41

Financial Summary Revenue (US$m) Operating EBITDA (US$m) Net Profit (US$m) Core EPS (US$) Core EPS Growth FD Core P/E (x) DPS (US$) Dividend Yield EV/EBITDA (x) P/FCFE (x) Net Gearing P/BV (x) ROE % Change In Core EPS Estimates CIMB/consensus EPS (x)

Dec-12A 158.7 74.0 78.8 0.08 35.1% 24.62 0.001 0.059% 25.97 NA 76% 2.79 17.2%

Dec-13A 281.9 164.6 152.5 0.13 69.4% 13.61 0.001 0.059% 16.48 NA 115% 2.51 20.2%

Dec-14F 457.7 295.4 213.0 0.16 28.3% 10.43 0.001 0.059% 11.72 NA 114% 1.89 21.1% (1.72%) 1.01

Dec-15F 683.0 406.2 299.5 0.23 40.4% 7.46 0.001 0.059% 8.14 13.88 73% 1.52 23.2% (5.23%) 1.03

Dec-16F 761.2 468.0 356.3 0.27 18.2% 6.29 0.001 0.059% 7.16 NA 60% 1.23 22.0% (0.44%) 1.06

SOURCE: CIMB, COMPANY REPORTS

Charts Figure 1: Ezion has secured ~US$600m contracts YTD, with an average of one contract per month Date

Contract

Contract value (US$m) 16 Jan 2014 Secured a 5 yr-contract to provide a liftboat to a national oil major in South East 94.0 Asia (believed to be Petronas) 18 Feb 2013 Secured a 3 yr-contract to provide a service rig to a national oil major in South 87.6 Asia (believed to be ONGC) 15 Apr 2014 Secured a 3 yr-contract to provide a service rig to a national oil major in South 43.7 Asia (believed to be ONGC) 15 Apr 2014 Secured a 3 yr-contract to provide a service rig to a state-linked company in the 35.0 Middle East 07 May 2014 Secured a 5 yr-contract to provide a service rig to an oil major in the Middle 63.9 East 15 Jul 2014 Secured a 7 yr-contract to provide a service rig to an East European national oil 122.6 major in the North Sea 15 Jul 2014 Secured a 5 yr-contract to provide a liftboat to a national oil major in South East 146.0 Asia Total contract value 592.8 SOURCES: CIMB, COMPANY REPORTS

2

Offshore & Marine│Ezion Holdings July 31, 2014

Figure 2: Status of liftboats/service rigs: the highlighted rows below show that we expect liftboat 13 (Yellow Sea), service rig 18 (Caspian Sea), service rig 27 (Indonesia) to come on stream in 3Q, while liftboat 9 (Indonesia), liftboat 17 (Europe) and liftboat Sunrise begins contributing in 4Q #

Unit

Ownership

Charter Type

1

Liftboat 1

100%

Bareboat

2 3

Liftboat 2 Liftboat 3

0% 100%

4

Liftboat 4

5

Expected End date Duration Option to on hire extend date Feb 2010 Jan 2013 3 yrs 2 yrs

Est. capex Revenue per (US$m) annum (US$m)

EBITDA per Charterer annum (US$m)

Area of operations

60.0

15.0

15.0

West Africa

Sale to a Middle Eastern client for US$78m. Completed in Mar 2011 Bareboat Dec 2010 Nov 2015 5 yrs 60.0

International oil major

16.4

16.4

Middle East

100%

Time charter Apr 2011

Mar 2014 3 yrs

60.0

18.0

12.0

Liftboat 5

100%

Bareboat

Mar 2015 3 yrs

60.0

15.0

15.0

6

Liftboat 6

100%

Time charter Jul 2012

Jun 2017

60.0

21.9

16.9

7 8

Service rig 7 Service rig 8

100% 50%

Bareboat Bareboat

123.0 85.0

25.5 18.3

25.5 18.3

9

Liftboat 9

100%

Time charter Oct 2014 NA

60.0

18.0

15.0

55.0

20.8

18.8

2 yrs

85.0

20.1

18.1

1 yr

90.0

39.3

30.3

Middle Eastern client National oil company National oil company National oil company Buccaneer Energy European oil company National oil company National oil company European oil company European oil company Chinese statelinked power generation enterprise National oil company National oil company European oil company European oil company National oil company National oil company National oil company National oil company National oil company National oil company NA

Apr 2012

5 yrs

Oct 2012 Sep 2017 5 yrs Jan 2012 Dec 2014 2 yrs

2 yrs

NA

10 Service rig 10 100%

Bareboat

Dec 2012 May 2017 4.5 yrs

11 Service rig 11 100%

Bareboat

Jan 2013

12 Service rig 12 100%

Bareboat

Oct 2013 Sep 2015 2 yrs

13 Liftboat 13

100%

Bareboat

Jul 2014

Jun 2018

4 yrs

72.0

16.4

16.4

14 Service rig 14 100%

Bareboat

Apr 2013

Mar 2016 4 yrs

55.0

20.0

15.0

15 Service rig 15 100%

Bareboat

Apr 2013

Mar 2016 4 yrs

55.0

21.6

16.6

16 Service rig 16 100%

Bareboat

Jan 2013

Dec 2017 5 yrs

60.0

20.0

18.0

17 Liftboat 17

100%

Bareboat

Oct 2014 Sep 2018 4 yrs

95.0

21.9

21.9

18 Service rig 18 100%

Bareboat

Jul 2014

Jun 2019

165.0

40.2

40.0

19 Liftboat 19

Bareboat

Jan 2015

Dec 2019 5 yrs

60.0

16.4

16.4

20 Service rig 20 50%

Bareboat

Mar 2013 Feb 2020 7 yrs

77.0

21.3

21.3

21 Service rig 21 50%

Bareboat

Mar 2013 Feb 2020 7 yrs

77.0

21.3

21.3

22 Liftboat 22

100%

Bareboat

Jul 2015

Jun 2018

1 yr

110.0

26.3

25.8

23 Service rig 23 100%

Bareboat

Jan 2014

Dec 2017 3 yrs

2 yrs

70.0

26.6

17.6

24 Liftboat 100% Sunrise 25 Service rig 25 100%

Bareboat

Oct 2014 NA

110.0

16.2

16.2

Bareboat

Jan 2014

Dec 2015 2 yrs

40.0

24.1

24.1

26 Service rig 26 50%

Bareboat

Jan 2014

Dec 2018 5 yrs

80.0

21.2

21.2

27 Service rig 27 100%

Time charter Jul 2014

Jun 2018

4 yrs

75.0

20.1

15.6

28 Liftboat 28

Bareboat

Jul 2015

Jun 2018

3 yrs

60.0

16.4

16.4

29 Service rig 29 50%

Bareboat

Oct 2014 Sep 2018 4 yrs

40.0

21.7

21.7

30 Liftboat 30

50%

Time charter Jan 2016

Jun 2018

3 yrs

60.0

21.7

16.7

31 Liftboat 31

100%

Time charter Jul 2016

Jun 2021

5 yrs

65.0

18.8

13.8

32 Service rig 32 100%

Bareboat

Apr 2015

Mar 2018 3 yrs

80.0

29.2

17.5

33 Service rig 33 100%

Bareboat

Oct 2015 Sep 2018 3 yrs

45.0

15.8

13.8

34 Service rig 34 100%

Bareboat

Oct 2015 Sep 2018 3 yrs

38.0

11.7

9.7

35 Service rig 35 0% 36 Service rig 36 0%

Bareboat Bareboat

Jan 2015 Dec 2020 5 yrs Oct 2015 Sep 2022 7 yrs

10.0 20.0

12.8 17.5

4.6 6.5

37 Liftboat 37

Time charter Jan 2017

90.0

29.2

22.0

100%

100%

100%

Dec 2015 2 yrs

5 yrs

3 yrs

NA

Dec 2021 3 yrs

2 yrs

2 yrs

2 yrs

Middle Eastern client National oil company National oil company National oil company National oil company National oil company National oil company National oil company National oil company State-linked company Oil major National oil company National oil company

Indonesia Brunei Indonesia Alaska Offshore Denmark Malayisa Gulf of Mexico Offshore Denmark Offshore Myanmar Yellow Sea, PRC

Gulf of Mexico Gulf of Mexico Offshore Denmark Offshore Denmark Caspian Sea Malayisa Gulf of Mexico Gulf of Mexico Vietnam South Asia NA Middle East Gulf of Mexico Indonesia Malayisa Middle East Malayisa Malayisa South Asia South Asia Middle East Middle East East Europe South East Asia

SOURCES: CIMB, COMPANY REPORTS

3

Offshore & Marine│Ezion Holdings July 31, 2014

Figure 3: Blended valuation Per share items Multiple peg Share price (S cts) (S$) FD CY15 P/E 28.65 9.0x 2.58 FD CY14 P/BV 112.03 2.0x 2.24 Average 2.41 Implied CY15 P/E (x) 8.4 Implied CY14 P/BV (x) 2.2 Method

Justification 5-yr rolling forward P/E mean 5-yr rolling P/BV mean

SOURCES: CIMB

Figure 4: 12-month rolling forward core P/E

Figure 5: Rolling P/BV

11.00

2.80 2.60

+1SD: 9.9x

2.40 9.00

+1SD: 2.2x

2.20

3-yr Ave (11-13): 8.2x

2.00

3-yr Ave (11-13): 1.8x

1.80 7.00

1.60

-1SD: 6.5x

-1SD: 1.4x

1.40 1.20 5.00

Jan-11

Jan-12

Jan-13

1.00

Jan-14

12-mth Fwd Rolling FD Core P/E (x)

Jan-11

Jan-12

Jan-13

Jan-14

Rolling P/BV (x)

SOURCES: CIMB

SOURCES: CIMB

4

Offshore & Marine│Ezion Holdings July 31, 2014

Figure 6: Peers Comparison Recom.

Price (lcl curr)

Target Price (lcl curr)

Market Cap (US$ m)

P/BV (x) CY2014

Recurring ROE (%) CY2014

Dividend Yield (%) CY2014

Add Hold

11.02 4.14

13.20 4.30

16,084 6,948

12.7 14.9 13.3

12.0 13.4 12.4

-5.2% 7.2% -2.2%

1.88 2.95 2.11

15.3% 20.5% 16.4%

3.5% 4.0% 3.7%

Cosco Corporation COS SP Yangzijiang Shipbuilding YZJSGD SP Chinese Shipbuilder weighted average

Reduce Add

0.71 1.09

0.47 1.53

1,277 3,340

38.4 7.6 9.7

33.0 8.2 10.4

13.7% -10.4% -8.9%

1.20 1.05 1.08

3.2% 14.7% 11.7%

1.2% 4.0% 3.2%

Sembcorp Industries ST Engineering SIA Engineering Industrial conglomerate weighted

Add Add Reduce

5.48 3.77 4.69

5.99 4.40 4.50

7,867 9,446 4,223

12.4 18.5 21.3 16.0

11.5 17.4 21.2 15.1

5.7% 7.1% -3.8% 4.7%

1.70 5.08 3.90 2.83

14.3% 28.2% 18.1% 18.2%

3.3% 5.0% 4.4% 4.2%

ASL Marine ASL SP Nam Cheong NCL SP Vard Holdings Ltd VARD SP Singapore-listed OSV builder weighted average

Hold Add Hold

0.68 0.46 1.10

0.69 0.44 1.14

229 775 1,043

9.5 9.7 12.4 10.9

9.4 8.7 9.3 9.1

-6.8% 16.1% 25.2% 16.7%

0.66 2.16 1.71 1.55

7.1% 24.3% 14.2% 14.9%

2.9% 2.1% 2.5% 2.4%

Ezion Holdings EZI SP Ezra Holdings EZRA SP Jaya Holdings JAYA SP Mermaid Maritime MMT SP Pacific Radiance Ltd PACRA SP Swiber Holdings SWIB SP Swissco Holdings Ltd SWCH SP Singapore OSV owner (weighted avg - excl NR) Singapore OSV owner (all simple average)

Add Add Hold Add NR Reduce NR

2.11 1.18 0.07 0.44 1.38 0.52 0.93

2.41 1.47 0.82 0.58 na 0.58 na

2,229 924 41 494 801 256 171

10.4 21.8 1.1 8.8 11.8 na 9.3 11.6 10.5

7.5 13.1 0.9 8.7 9.8 160.0 9.3 8.3 29.9

35.1% 314.2% 6.7% 47.4% 15.4% -82.0% na 37.7% 56.1%

1.89 0.80 0.07 0.84 1.82 0.50 na 0.99 0.99

21.1% 3.8% 7.0% 9.9% 17.4% -2.3% na 9.0% 9.5%

0.1% 1.2% 60.4% 0.0% 1.6% 0.0% na 0.9% 10.5%

Alam Maritim Resources Bhd AMRB MK Bumi Armada BAB MK Malaysia Marine & Heavy Eng MMHE MK Perdana Petroleum PETR MK Perisai Petroleum PPT MK SapuraKencana Petroleum SAKP MK TH Heavy Engineering RH MK UMW Oil & Gas UMWOG MK Malaysia offshore (weighted avg - excl NR) Malaysia offshore (all simple average)

NR Add Hold Add Add Add Add Add

1.54 3.35 3.53 1.85 1.54 4.29 0.92 4.07

na 4.56 3.98 2.40 2.37 7.00 1.20 5.18

446 3,088 1,775 429 577 8,077 295 2,765

13.3 18.0 21.6 14.1 31.2 16.0 36.3 27.5 18.6 22.3

11.5 16.6 20.0 12.7 10.5 14.3 12.5 18.4 15.4 14.6

17.6% 15.0% 21.0% 35.0% 36.8% 37.1% 156.7% 58.5% 39.0% 47.2%

1.81 2.95 2.31 2.16 2.32 4.15 2.29 7.39 3.62 3.17

14.5% 18.0% 10.7% 15.9% 6.7% 19.2% 6.4% 15.7% 16.4% 13.4%

0.2% 1.2% 1.7% 0.0% 0.0% 0.6% 0.0% 0.5% 0.8% 0.5%

Logindo Samudramakmur Tbk P LEAD IJ Wintermar Offshore Marine WINS IJ Indonesia offshore (all simple average)

NR Add

5,000 1,410

na 1,580

278 490

12.3 15.7 14.0

9.7 12.9 11.3

13.2% 14.1% 13.6%

2.08 2.23 2.15

19.4% 14.9% 17.2%

1.4% 0.6% 1.0%

Samsung Heavy Industries 010140 KS Hyundai Heavy Industries 009540 KS Daewoo Shipbuilding & Marine 042660 KS Hyundai Mipo Dockyard 010620 KS Korean Shipbuilder weighted average

Hold Add Add Add

27,750 152,500 25,300 128,500

30,000 270,000 37,000 193,000

6,254 11,314 4,727 2,509

40.8 na 16.6 na na

9.9 17.2 10.3 50.2 13.8

4.5% 60.8% 36.9% na 44.6%

1.09 0.73 0.94 0.97 0.86

2.6% -7.1% 5.7% -13.3% -3.7%

1.8% 0.0% 1.2% 0.0% 0.7%

TK Corp 023160 KQ Sung Kwang Bend 014620 KQ Korean offshore equipments weighted average

Add Add

15,400 20,300

30,000 30,000

387 567

4.8 9.9 7.1

4.2 8.8 6.2

24.3% 1.8% 12.7%

0.70 1.21 0.95

15.6% 12.8% 14.2%

0.1% 0.7% 0.5%

NR NR NR NR NR NR

48.51 42.80 22.23 38.87 115.5 106.0

na na na na na na

2,412 1,552 2,220 1,049 720 655

17.1 17.4 22.6 11.7 9.1 5.6 13.9

10.3 10.2 15.0 9.2 6.8 4.7 9.4

0.9% 1.1% 1.1% 0.9% 0.6% 0.7% 0.9%

0.86 1.13 1.11 0.91 0.61 0.73 0.89

7.3% 7.5% 6.4% 8.0% 7.0% 14.1% 8.4%

2.1% 0.0% 4.5% 2.6% 3.0% 4.9% 2.8%

24.3 16.2

13.1 16.6

14.2% 25.0%

1.56 1.81

6.3% 11.2%

2.3% 3.2%

Company

Bloomberg Ticker

Keppel Corporation KEP SP Sembcorp Marine SMM SP Singapore offshore - big cap weighted average

SCI SP STE SP SIE SP average

International OSV owner Tidewater Inc TDW US Hornbeck Offshore Services Inc HOS US Bourbon SA GBB FP Gulfmark Offshore Inc GLF US Farstad Shipping ASA FAR NO Solstad Offshore ASA SOFF N International OSV owner (all simple average) Average (All ex NR co) Average (All simple)

FD Core P/E (x) 2-year EPS CY2014 CY2015 CAGR (%)

SOURCES: CIMB, COMPANY REPORTS, BLOOMBERG

5

Offshore & Marine│Ezion Holdings July 31, 2014

Profit & Loss

Balance Sheet

(US$m) Total Net Revenues Gross Profit Operating EBITDA Depreciation And Amortisation Operating EBIT Financial Income/(Expense) Pretax Income/(Loss) from Assoc. Non-Operating Income/(Expense) Profit Before Tax (pre-EI) Exceptional Items Pre-tax Profit Taxation Exceptional Income - post-tax Profit After Tax Minority Interests Preferred Dividends FX Gain/(Loss) - post tax Other Adjustments - post-tax Net Profit Recurring Net Profit Fully Diluted Recurring Net Profit

Dec-13A 281.9 133.2 164.6 (45.4) 119.2 (6.8) 30.9 0.0 143.2 19.7 163.0 (2.6)

Dec-14F 457.7 215.5 295.4 (95.2) 200.2 (14.0) 26.7 0.0 212.9 10.2 223.1 (2.2)

Dec-15F 683.0 320.6 406.2 (109.9) 296.3 (14.0) 28.1 0.0 310.4 0.0 310.4 (3.1)

Dec-16F 761.2 375.6 468.0 (119.9) 348.1 (14.0) 33.7 0.0 367.8 0.0 367.8 (3.7)

160.3 (0.1) (7.8)

220.8 0.0 (7.8)

307.3 0.0 (7.8)

364.1 0.0 (7.8)

152.5 133.1 133.1

213.0 202.9 202.9

299.5 299.5 299.5

356.3 356.3 356.3

(US$m) Total Cash And Equivalents Total Debtors Inventories Total Other Current Assets Total Current Assets Fixed Assets Total Investments Intangible Assets Total Other Non-Current Assets Total Non-current Assets Short-term Debt Current Portion of Long-Term Debt Total Creditors Other Current Liabilities Total Current Liabilities Total Long-term Debt Hybrid Debt - Debt Component Total Other Non-Current Liabilities Total Non-current Liabilities Total Provisions Total Liabilities Shareholders' Equity Minority Interests Total Equity

Dec-14F 112 132 0 107 350 2,199 221 0 5 2,425 287

Dec-15F 264 196 0 107 567 2,179 249 0 5 2,434 281

Dec-16F 205 219 0 107 531 2,520 283 0 5 2,807 275

146 7 376 863

153 7 446 1,158

190 7 478 1,054

202 7 484 1,030

4 866 0 1,243 800 (0) 800

4 1,162 0 1,608 1,168 (0) 1,168

4 1,058 0 1,535 1,466 (0) 1,466

4 1,034 0 1,518 1,822 (0) 1,822

Dec-13A 77.7% 122% 58.4% (0.78) 0.68 9.73 1.62% 0.63% 106.5 125.8 11.6% 8.3%

Dec-14F 62.3% 79% 64.5% (1.02) 0.89 10.01 1.00% 0.49% 95.2 108.8 10.9% 9.2%

Dec-15F 49.2% 38% 59.5% (0.82) 1.12 14.82 1.00% 0.35% 87.7 94.4 10.8% 11.2%

Dec-16F 11.4% 15% 61.5% (0.83) 1.38 17.41 1.00% 0.29% 99.9 112.7 12.6% 11.9%

Dec-13A N/A N/A N/A 21,893.3 60 N/A

Dec-14F N/A N/A N/A 27,875.2 72 N/A

Dec-15F N/A N/A N/A 33,958.8 73 N/A

Dec-16F N/A N/A N/A 36,324.0 74 N/A

Key Ratios

Cash Flow (US$m) EBITDA Cash Flow from Invt. & Assoc. Change In Working Capital (Incr)/Decr in Total Provisions Other Non-Cash (Income)/Expense Other Operating Cashflow Net Interest (Paid)/Received Tax Paid Cashflow From Operations Capex Disposals Of FAs/subsidiaries Acq. Of Subsidiaries/investments Other Investing Cashflow Cash Flow From Investing Debt Raised/(repaid) Proceeds From Issue Of Shares Shares Repurchased Dividends Paid Preferred Dividends Other Financing Cashflow Cash Flow From Financing Total Cash Generated Free Cashflow To Equity Free Cashflow To Firm

Dec-13A 164.6

Dec-14F 295.4

Dec-15F 406.2

Dec-16F 468.0

(5.1)

(18.4)

(27.8)

(9.6)

0.0

0.0

0.0

(21.5) 13.0 (12.5) (2.3) 136.2 (751.3) 76.1 (58.7) 1.0 (732.9) 530.2 72.4 0.0 (0.8) 0.0 26.4 628.2 31.5 (66.5) (583.8)

(14.0) (2.2) 260.7 (830.0) 0.0 0.0 0.0 (830.0) 359.1 155.2 0.0 (0.8) (7.8) (0.4) 505.3 (63.9) (210.2) (549.3)

(14.0) (3.1) 361.4 (90.5) 0.0 0.0 0.0 (90.5) (110.0) 0.0 0.0 (1.0) (7.8) (0.4) (119.1) 151.8 160.9 290.9

Revenue Growth Operating EBITDA Growth Operating EBITDA Margin Net Cash Per Share (US$) BVPS (US$) Gross Interest Cover Effective Tax Rate Net Dividend Payout Ratio Accounts Receivables Days Inventory Days Accounts Payables Days ROIC (%) ROCE (%)

(14.0) (3.7) 440.7 (460.0) 0.0 0.0 0.0 (460.0) (30.0) 0.0 0.0 (1.0) (7.8) (0.4) (39.2) (58.5) (49.3) 0.7

Key Drivers

12-month Forward Rolling FD P/E (x) 50 45

Outstanding Orderbook (US$m) Order Book Wins (US$m) Order Book Depletion (US$m) Average Day Rate Per Ship (US$) No. Of Ships (unit) Average Utilisation Rate (%)

40 35 30 25 20 15 10 5 0 Jan-10

Dec-13A 166 107 0 107 380 1,464 194 0 5 1,663 223

Jan-11

Ezion Holdings

Jan-12 Ezra Holdings

Jan-13

Jan-14

Mermaid Maritime

Swiber Holdings

6

Offshore & Marine│Ezion Holdings July 31, 2014

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Offshore & Marine│Ezion Holdings July 31, 2014

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Offshore & Marine│Ezion Holdings July 31, 2014

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Distribution of stock ratings and investment banking clients for quarter ended on 30 June 2014 1467 companies under coverage for quarter ended on 30 June 2014 Outperform/Buy/Trading Buy/Add

Rating Distribution (%)

Investment Banking clients (%)

58.9%

7.2%

Neutral/Hold

27.9%

3.9%

Underperform/Sell/Trading Sell/Reduce

13.2%

1.0%

Spitzer Chart for stock being researched ( 2 year data )

Ezion Holdings (EZI SP)

Hold

Neutral

Apr-13

Reduce

Underperform

Aug-13

Trading Buy

Dec-13

Trading sell

2.48

2.47

2.59

2.79

2.75

2.752.20

2.68

2.56

2.29 2.55

2.061.89 2.17

1.68

1.65 1.64

1.141.15 1.19

2.60 Recommendations & Target Price 2.40 2.20 2.00 1.80 1.60 1.40 1.20 1.00 0.80 Add Outperform 0.60 Jul-12 Nov-12

1.85

Price Close

Not Rated

Apr-14

As at the time of publishing this report CIMB is phasing in an absolute recommendation structure for stocks (Framework #1). Please refer to all frameworks for a definition of any recommendations stated in this report.

CIMB Recommendation Framework #1 Stock Ratings Add Hold Reduce

Definition The stock’s total return is expected to exceed 10% over the next 12 months. The stock’s total return is expected to be between 0% and positive 10% over the next 12 months. The stock’s total return is expected to fall below 0% or more over the next 12 months.

The total expected return of a stock is defined as the sum of the: (i) percentage difference between the target price and the current price and (ii) the forward net dividend yields of the stock. Stock price targets have an investment horizon of 12 months. Sector Ratings Overweight Neutral Underweight

Definition An Overweight rating means stocks in the sector have, on a market cap-weighted basis, a positive absolute recommendation. A Neutral rating means stocks in the sector have, on a market cap-weighted basis, a neutral absolute recommendation. An Underweight rating means stocks in the sector have, on a market cap-weighted basis, a negative absolute recommendation.

Country Ratings Overweight Neutral Underweight

Definition An Overweight rating means investors should be positioned with an above-market weight in this country relative to benchmark. A Neutral rating means investors should be positioned with a neutral weight in this country relative to benchmark. An Underweight rating means investors should be positioned with a below-market weight in this country relative to benchmark.

CIMB Stock Recommendation Framework #2 * Outperform Neutral Underperform Trading Buy Trading Sell

The stock's total return is expected to exceed a relevant benchmark's total return by 5% or more over the next 12 months. The stock's total return is expected to be within +/-5% of a relevant benchmark's total return. The stock's total return is expected to be below a relevant benchmark's total return by 5% or more over the next 12 months. The stock's total return is expected to exceed a relevant benchmark's total return by 3% or more over the next 3 months. The stock's total return is expected to be below a relevant benchmark's total return by 3% or more over the next 3 months. 9

Offshore & Marine│Ezion Holdings July 31, 2014

* This framework only applies to stocks listed on the Singapore Stock Exchange, Bursa Malaysia, Stock Exchange of Thailand, Jakarta Stock Exchange, Australian Securities Exchange, Taiwan Stock Exchange and National Stock Exchange of India/Bombay Stock Exchange. Occasionally, it is permitted for the total expected returns to be temporarily outside the prescribed ranges due to extreme market volatility or other justifiable company or industry-specific reasons. CIMB Research Pte Ltd (Co. Reg. No. 198701620M)

CIMB Stock Recommendation Framework #3 ** Outperform Neutral Underperform Trading Buy Trading Sell

Expected positive total returns of 10% or more over the next 12 months. Expected total returns of between -10% and +10% over the next 12 months. Expected negative total returns of 10% or more over the next 12 months. Expected positive total returns of 10% or more over the next 3 months. Expected negative total returns of 10% or more over the next 3 months.

** This framework only applies to stocks listed on the Korea Exchange, Hong Kong Stock Exchange and China listings on the Singapore Stock Exchange. Occasionally, it is permitted for the total expected returns to be temporarily outside the prescribed ranges due to extreme market volatility or other justifiable company or industry-specific reasons. Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (IOD) in 2013. AAV – Good, ADVANC - Excellent, AMATA - Very Good, ANAN – Good, AOT - Excellent, AP - Very Good, BANPU - Excellent , BAY - Excellent , BBL - Excellent, BCH – Good, BCP - Excellent, BEC - Very Good, BGH - not available, BJC – Very Good, BH - Very Good, BIGC - Very Good, BTS - Excellent, CCET – Very Good, CENTEL – Very Good, CK Excellent, CPALL - Very Good, CPF – Excellent, CPN - Excellent, DELTA - Very Good, DTAC - Excellent, EGCO – Excellent, GLOBAL - Good, GLOW - Very Good, GRAMMY – Excellent, HANA - Excellent, HEMRAJ - Excellent, HMPRO - Very Good, INTUCH – Excellent, ITD – Very Good, IVL - Excellent, JAS – Very Good, KAMART – not available, KBANK - Excellent, KKP – Excellent, KTB - Excellent, LH - Very Good, LPN - Excellent, MAJOR – Very Good, MAKRO – Very Good, MCOT - Excellent, MEGA – not available, MINT - Excellent, PS - Excellent, PSL - Excellent, PTT - Excellent, PTTGC - Excellent, PTTEP - Excellent, QH - Excellent, RATCH - Excellent, ROBINS - Excellent, RS – Excellent, SAMART – Excellent, SC – Excellent, SCB - Excellent, SCC - Excellent, SCCC - Very Good, SIRI – Very Good, SPALI - Excellent, STA - Good, STEC - Very Good, TCAP Excellent, THAI - Excellent, THCOM – Excellent, TICON – Very Good, TISCO - Excellent, TMB - Excellent, TOP - Excellent, TRUE - Excellent, TTW – Excellent, TUF - Very Good, VGI – Excellent, WORK – Good.

10