SINGAPORE (Sept 16): OCBC Investment Research is maintaining its “hold” call on Ezion Holdings with an unchanged target price of 30 cents, with the view that the group’s recent acquisition of an Indonesian shipping company has “little impact on earnings estimates for now”.

(See also: Inflexion point ahead for Ezion)

Ezion in June announced its wholly-owned subsidiary, ES Indonesia, had entered into a joint venture (JV) agreement to acquire a 49% stake in an Indonesian company that will own, charter and operate vessels.

The said company was later on revealed by local media sources to be PT Pelita Bara Samudera (PBS), which was once wholly-owned by Indonesian-focused private equity (PE) firm Quvat Group.

(See also: Ezion unit ES Indonesia enters into JV to acquire 49% stake in vessel charterer)

“We understand from Ezion’s management that the JV only has one vessel now,” states lead analyst Low Pei Han in a Thursday report.

Despite Ezion’s plans to grow the fleet, she believes the group’s share of the estimated profit from this is “not significant” compared to its current yearly net profit – and therefore will have limited impact on OCBC’s earnings estimates for the group at present.  

However, Low thinks the move could strengthen Ezion’s relationship with Pertamina, an Indonesian national oil company which the JV has taken delivery of an oil product tanker for. This in turn could present more opportunities for the group in future, says the analyst.   

She reiterates that 3Q16 is likely to be a lacklustre one for the group.

Helmed by CEO Lennardi Anggijono, PBS is currently in the process of exiting the dry bulk business to enter the tanker segment.

It was also reported that the company in late 2015 sold three bulkers for US$3.5 million ($4.8 million) each to Chinese buyers, after revealing that the contract rates on offer by Indonesian clients do not justify its continued presence in the dry sector.

As at 11.09am, shares of Ezion are trading 1.85% lower at 26.5 cents.