Nam Cheong has recently corrected to 65 cents, an attractively low level with a trailing PE of 3-4X. |
Excerpts from CGS report
Analysts: Meghana KANDE & LIM Siew Khee
Pacific Radiance Ltd (PACRA) -- Turnaround story coming through
| ■ With all vessels fully reactivated, PACRA posted strong revenue growth of 28% yoy to US$24m in 1H25, in line with our expectations.
■ We were pleasantly surprised by PACRA’s 49% GM in 1H25, thanks to the reactivation of accommodation work barge, likely to be sustainable in 2H25F. ■ Successful delivery of its self-constructed CTV highlights the yard’s newbuild capabilities, in our view. ■ Reiterate Add with a higher TP of S$0.09 (7x FY26F P/E). Vessel additions to its fleet could catalyse the stock, in our view. |
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1H25: margin improvement shines
Pacific Radiance (PACRA) delivered a strong 1H25 gross margin of 49% vs. 32% in 1H24. 
We attribute this to
| 1) the reactivation of its last vessel (an accommodation work barge) which started work in early-2025 and 2) a favourable revenue mix shift towards ship management. |
1H25 revenue of US$24m (+28% yoy) was in line at 50% of our FY25F forecast, while 1H25 core PATMI beat expectations at US$6m, ahead of our FY25F forecast of US$5m.
| All vessels back in play |
Ship leasing and chartering revenues in 1H25 were up 31% yoy to US$9m, largely driven by contribution from its reactivated vessels.
Excluding the impact of the third-party charter income it earned in 2024, we estimate the underlying revenue uplift could have been stronger.
As of end-Jun 25, PACRA had four vessels deployed in the Middle East on 1-3 year contracts.
Our channel checks suggest resilient OSV demand from upstream players in the Middle East, which could drive higher vessel charter rates ahead, in our view.
|
Name |
Type |
Location |
Comments |
|
Pacific Radiance’s fully-owned vessels |
|||
|
Crest Radiant |
Multipurpose support vessel |
Abu Dhabi |
In operation |
|
Crest Mars |
Workboat |
Abu Dhabi |
Started working since 2Q24 |
|
Crest Mercury 2 |
Anchor handling tug and supply vessel |
Abu Dhabi |
Started working since 3Q24 |
|
Crest Station 1 |
Accommodation work barge |
Abu Dhabi |
Started working since 1Q25 |
|
Vessels under Taiwanese JV Mainprize Asia (49% stake) |
|||
|
Prosperous 1 |
Crew transfer vessel |
Taiwan |
12 pax, 5 crew, built 2020 |
|
Prosperous 2 |
Crew transfer vessel |
Taiwan |
12 pax, built 2013 |
|
Prosperous 3 |
Crew transfer vessel |
Taiwan |
24 pax, built 2023 |
|
Prosperous 5 |
Crew transfer vessel |
Taiwan |
24 pax, built 2024 |
|
New CTV delivered in 2H25 |
Taiwan |
2025 |
Source: CGS
| Added 1 newbuild CTV in Taiwan, with 1 more to go |
PACRA has 4 crew transfer vessels (CTVs) servicing offshore wind farms in Taiwan, as of end-Jun 25.
We understand from management that it delivered one of 2 CTVs under construction at its yard to its Taiwanese JV, with contribution expected from 2H25F.
The second CTV is pending sale agreement, which would bring total CTV count to 6 units.
Apart from this, yard revenues (+12% yoy in 1H25) were healthy due to higher repair volumes
We raise our FY25F-27F core PATMI estimates to US$13m-15m from US$5m-8m to factor in higher GM assumptions (49-50% vs. 37-40%).  Meghana Kande, analystOur Add call is backed by its sustainable profit turnaround. Given its US$15m net cash and an active, contracted fleet, we think new vessel additions will be a key re-rating catalyst for the stock. Other catalysts: sale or contract for its second CTV under construction, and higher-than-expected vessel charter rates. With consecutive core net profit over the past 12 months, we believe P/E is a more representative valuation method for PACRA and now peg it to 7x FY26F P/E, a 30% discount to peers’ 10.5x given the former’s smaller fleet (previously c.0.7x FY25F P/BV). Downside risks: weak ship repair demand for yard and lower-than-expected fleet utilisation affecting revenues. |
Full report here.
