1Q09 results in line with expectations ? Ezion reported revenue growth of 211.1% to S$14.6m in 1Q09, mainly due to increase in revenue from offshore logistics support services. In line with increased business activities, the Group's operating expenses increased 177.9% to S$1.7m, resulting in 181.5% net profit growth to S$3.3m in 1Q09.

Gorgon project A$350m contract wins ? Just the beginning ? The contract win of A$350m excites us in three ways - (1) Ezion, being the lead manager of the Consortium, reinforces Ezion's capabilities in the offshore support industry. (2) The contract win of A$350m is just a fraction of the estimated capital expenditure for Gorgon gas field, projected to be around A$50 billion. (3) Given that the Consortium is involved in the early stages of the Gorgon Project, we believe the Consortium is well positioned to capture a substantial portion of the total capital expenditure going forward. The in-depth knowledge expected to be acquired by the Consortium from the early stage involvement is likely to create a high barrier of entry for the Consortium's competitors for subsequent contract biddings.

Earnings forecast revised ? We lower our earnings estimates for FY09F by 15% to S$18.7m, after including contribution from share of profits from Gorgon project as well as pushing back delivery of the first two units of multi-purpose self-propelled jack-up rigs to 4Q09 and 1Q10 (previously assumed 3Q09 delivery).

Maintain BUY with target price revised to S$0.94 ? We change our valuation metric from discounted cash flow to price-to-earning based as we expect the group's activities and growth prospects to be earnings driven. We raise our 12-month target price to S$0.94, based on 10x FY10F EPS, justified by its strong earnings outlook, further underpinned by robust industry dynamics. With an upside potential of 62%, we maintain our BUY recommendation on Ezion.