FY08 net profit of S$8.0m was within our expectations of S$8.7m. Revenue rose strongly by 130% yoy to S$31.1m on strong demand for offshore logistics support services as new vessels were added to the fleet. However, gross margin dipped to 45.9% from 48.7% in FY07, the result of the global slowdown and lower average charter rates due to a higher mix of longer duration charters. A final dividend of 0.06 Scts was declared. We expect Ezion to remain profitable given its unique vessel fleet targeting the maintenance support services of the oil & gas industry. Unfortunately, given the weak investor sentiment for small cap stocks, there appears to be a lack of interest in Ezion. As such, we are ceasing coverage on Ezion. The forecasts in this report have not been adjusted for the FY08 results. Previously, we had an Outperform recommendation with a target price of S$0.47.

FY08 results in line with expectations : Ezion reported net profit of S$8.0m, in line with our earnings estimates of S$8.1m. The Group's revenue & gross profit for FY08 increased 130.1% & 116.6% to S$31.1m & S$14.3m respectively, slightly ahead of our forecast of S$25.3m & S$12.7m, mainly due to the increase in the revenue of S$15.6m from the offshore logistics support services as a result of the contribution from the additional vessels in FY08 and full year of operation of the division in FY08 as compared to 9 months of operation in FY07. However, higher than expected operating expenses in FY08 brought earnings in line with our forecasts.

Earnings forecast lowered : We have lowered our FY09F earnings estimates by 15.0% to S$21.9m after adjusting for the higher operating cost. Dividends declared : Ezion declared Sg 0.06 cts of final dividends, providing a dividend yield of 0.5%.

Maintain BUY with target price of S$0.20 ? We continue to value Ezion at S$0.20 based on DCF valuation methodology. With an upside potential of 54%, we maintain our BUY recommendation on Ezion.