PACIFIC RADIANCE & NAM CHEONG: Positive Momentum Attracts Analyst Bullishness

THE CONTEXT

• Pacific Radiance's stock surged 54% to 7.5 cents year-to-date with most of the gains happening in one month -- Aug 2025 -- after fresh positive coverage from CGS and Phillip Securities.

Hailed as a "turnaround story" with a fleet of 8 vessels, Pacific Radiance posted a 1H2025 profit of US$5.9 million—a stark reversal from a modest profit in 1H2024 (after excluding one-off gains).

• Then there is Nam Cheong Ltd, with a fleet of 38 vessels and a 71% gain in stock price year-to-date.

Its gains were built up over 2024 and 2025 with DBS Research, the first to cover the stock after it resumed trading in early 2024, describing it as an "undervalued OSV gem" in July 2025.

• How do Pacific Radiance and Nam Cheong compare in valuation metrics and upside potential? Let's check that out using data from analyst reports:

Metric	Pacific Radiance (CGS)	Pacific Radiance (Phillip)	Nam Cheong (DBS)
Recent Price	7.5 cents	7.5 cents	71 cents
Target Price	9.0 cents	9.8 cents	$1.05
Upside Potential	20.0%	30.7 %	47.9%
Market Cap (SGD m)	~109	~109	~281
P/E (FY25F)	6.6x	7.7x	4.1x
EV/EBITDA (FY25F)	2.7x	3.69x	3.3x
P/BV (FY25F)	0.84x	0.94x	1.2x
Dividend Yield (FY25F)	0.59%	0.8%	0.0
ROE (FY25F)	14.5%	16.0%	33.6%
Net Gearing/Debt-Equity (x)	-26.9% (net cash)	Net cash	0.2

• Analyst sentiment is highly positive for both, viewing them as beneficiaries of OSV demand recovery amid tight supply.

• Pacific Radiance offers sustainable turnaround, is in net cash position and has high margins/utilization.

It's set to benefit from renewable energy projects and shiprepairs, growing at 5-12% EPS over FY26-27 — and looks ideal for risk-averse investors.

• On the other hand, Nam Cheong has higher growth potential (double-digit from 2H25) as it increases fleet utilisation from 60% to 80% with the ramp-up of long-term charters.

• For more on Pacific Radiance, read excerpts of new Phillip Securities' report below...

Excerpts from Phillip Securities report
Analyst: Paul Chew

Pacific Radiance (PACRA) -- On cruise control

▪ 1H25 revenue was below expectations at 37% of FY25e forecast but adj. PATMI was a large beat at 81%.

Gross margins were higher than expected, due to a larger contribution from chartering revenue. General and admin costs trended much lower than modelled as revenue scaled up—our adj. PATMI excludes S$1.8mn of deferred tax writeback.

Pacific Radiance
Share price: 7.5 c	Target: 9.8 c

▪ The three new vessels (accommodation barge, workboat, AHTS) deployed supported growth in 1H25 ship chartering and management revenue.

Demand remains robust for offshore support vessels (OSVs) due to production targets in the Middle East, demand from Asian offshore wind deployment, and the limited number of vessels ordered.

▪ We raise our FY25e PATMI by 43% to US$11mn on higher gross margins and lower general and admin costs. The target price is raised to S$0.098 (from S$0.06) as we peg valuations to an 8x PE, which remains a discount to the industry's 10x PE.

PacRad 1H25financials

The discount is due to the high risk and reliance on a limited number of vessels.

We expect stable earnings with growth driven by higher charter rates from the AHST and workboat, as well as contributions from the sale of two CTVs and increased ship repair revenue due to the ageing global OSV fleet.

The company is in a net cash position of US$15.4mn.

The Positive
+ Margin expansion. Gross margins expanded 16% points YoY to 49%.

A higher contribution from ship chartering income at attractive rates drove margins.

General and admin expense was stable despite the increase in revenue, driven by higher operating leverage.

The Negative
- Nil

Outlook

We believe Pacific Radiance has hit steady state in earnings. The key vessel, accommodation barge Crest Station 1, has locked in multi-year contracts in the UAE.

PaulChew

Paul Chew, analystGrowth will be muted without the acquisition of new vessels or the revival of laid-up vessels.

In 2H25, we expected a contribution from the completion and sale of two CTVs (crew transfer vessels).

Demand for CTVs remains healthy, although a lull may occur in Taiwan due to the delayed construction of offshore wind farms.

However, demand is expected to resume from 2027, with demand from South Korea serving as an added driver.

Ship repair demand is healthy with the ageing of OSVs globally. Higher charter rates from AHTS and workboats could support growth in 2026.

Maintain BUY with higher TP of S$0.098 (prev. S$0.06)

Full Phillip Securities report here.

Article on CGS report: PACIFIC RADIANCE: Surges 24% in 1 Day After Analyst Highlights ‘Emerging Turnaround’ Story