CIMB says it is positive on Triyards, Ezra’s fabrication division, after a management meeting. 

It notes Triyards’ orderbook is US$200 million ($245 million) “it is in a sweet spot to benefit from growing demand for niche self-elevating units (SEUs). Our checks on the ground with several Singapore O& M operators confirm Triyards’ good reputation for execution, especially in the construction of turnkey SEUs.”

It estimates Triyards’ market cap could amount to $250 million, or $0.86/share, based on 11x 2013 P/E, after its listing.

CIMB is neutral on Ezra’s recent issues of $200 million three-year 5% fixed-rate bonds and $150 million perpetual bonds at 8.75% while net gearing should improve, FY13 ROEs could be diluted to about 8%, leaving little room for error as it is near the coupon rates, it says.

But it adds, “investors should look beyond 4Q12 to focus on FY13 as Ezra is on track to deliver 125% earnings growth. The growth would be led by better subsea utilisation, a recovery in day rates for its offshore division and stronger orders for niche self-elevating units, benefiting Triyards.”

It keeps an Outperform call with $1.38 target. Ezra is up 4.2% at $1.23.