around $1.3 fair value

I have sold all my holding after reading the annual report. At a first glance, the report looks not bad, flat revenue and profit. However if we look at Q2-Q4, the number is much lower than last year. Q1 is usually a low season for EZZ, but the sales figure in Q1 2025 is outstanding, which makes the result potentially misleading. Ezz is actually showing a downtrend recently.

There are other worrying points:
Cost on US expansion is unknown. It is difficult for a OZ company to success in US, and the loss from US cannot offset income tax in AU.

Potential salary raise for employees. Ezz employees still earn less than their peers, it might not continue.

Distributor Pinehill dumping shares, with several other top holders selling and retail clients accumulating. I see low confidence from stakeholders.

New distribution contract with ROFA potentially conflicts with the distribution contract with Pinehills. They both focus on Vietnam and other southeast Asia counties.

And I also quote 'Trade and other receivables increased by 70.47% to $4,557,850, predominantly due to increased trade receivables from the new wholesale channel, Pinehills Limited. However, the majority of these outstanding receivables remain in line with the Group’s credit terms.' It is the only place where Pinehills is mentioned in annual report. Maybe nothing wrong, but all these looks strange to me.

The sales from China online platform is lower than last year based on my own observation. EZZ continue to launch new products but hard to sell. which also causes inventories growing.

Double top on chart. A bearish technical chart pattern.

Overall, I think EZZ will continue to deliver good performance. Sales might be flat or slightly lower, and profit could drop further. $1.3 is rather fair if Q1 2026 does not repeat the succuss in Q1 2025. 5m profit and PE of 13, based on my forecast.