Stock Upgraded: Ezra Holdings price target to 4.1 by DBS Vickers

DBS Vickers Securities said it has raised its target price for Ezra Holdings Ltd to 4.10 sgd from 3.30 given the company's stronger earnings prospects after it won a new long-term charter deal and following its entry into the Indian offshore market. DBS said it welcomes Ezra's long-term charter of a floating production storage and offloading facility (FPSO) worth up to 397.25 mln usd and its foray into the Indian market. "The FPSO contract can lift earnings strongly in the medium term," DBS Vickers analyst Jesvindher Sandhu said in a note. She said the FPSO cost outlay is estimated at 180-200 mln usd. "Assuming that Ezra has a 100 pct stake in the FPSO, we conservatively estimate that the FPSO can contribute around 14.2 mln usd per annum, on revenue of 65.3 mln usd, for the first four years," she said. DBS Vickers estimates Ezra will report a net profit of 53.7 mln sgd for the year to August 2006, and forecasts this will rise to 55.5 mln and 89.2 mln in the years to August 2007 and 2008, respectively. It sees further upside to Ezra's year to August 2008 earnings numbers once the company finalizes its financing options for the FPSO. At 10.16 am, Ezra was up 0.12 sgd or 3.55 pct at 3.50 on volume of 501, 000 shares.