CGS International
August 19, 2025

Pacific Radiance (PACRA): Turnaround Momentum Accelerates with Margin Expansion, Fleet Reactivation, and Newbuild Capabilities

Overview: PACRA’s Remarkable Transformation in Offshore & Marine

Pacific Radiance (PACRA), a Singapore-based offshore and marine services provider, has delivered an impressive turnaround in 1H25, showcasing robust growth in both revenue and profitability. With all vessels fully reactivated, a significant uptick in margins, and the demonstration of newbuild capabilities, PACRA is positioning itself as a rising star in the sector. The company is rated “Add” with a revised target price (TP) of S$0.09, reflecting an 80% upside potential from the current price of S$0.05.

1H25 Financial Highlights: Strong Revenue and Margin Expansion

PACRA’s financial performance for the first half of 2025 has exceeded expectations, primarily driven by the full deployment of its vessel fleet and a favorable revenue mix shift. The company posted a 1H25 gross margin of 49%, up sharply from 32% in 1H24. This margin improvement is attributed to:

• Reactivation of its accommodation work barge in early 2025
• Increased contribution from higher-margin ship management activities

Fleet Reactivation Powers Revenue Growth

By end-June 2025, all PACRA vessels were operational, with four deployed in the Middle East under 1-3 year contracts. Ship leasing and chartering revenue rose 31% year-on-year to US$9m, primarily from these reactivated vessels. The Middle East continues to show resilience in offshore support vessel (OSV) demand, suggesting potential for higher charter rates ahead.

Expanding Capabilities: Newbuild Crew Transfer Vessels (CTVs) in Taiwan

PACRA is extending its footprint in the offshore wind sector with four CTVs servicing wind farms in Taiwan. In 1H25, one of two newbuild CTVs was delivered to its Taiwanese joint venture, with earnings contributions expected from 2H25 onwards. The second CTV is pending a sale agreement, which would bring the total CTV count to six units. Yard revenue also showed healthy growth (+12% yoy), backed by higher ship repair volumes.

Upgraded Earnings Estimates and Valuation

Core PATMI forecasts for FY25F-27F have been raised significantly, reflecting higher margin expectations (49-50% vs. prior 37-40%). The company’s net cash position of US$15m and an active, contracted fleet create headroom for new vessel additions, which could further catalyze the stock.

Key changes in this report include a dramatic 111%-162% increase in FY25F-27F EPS estimates, attributed to the improved margin outlook.

Valuation and Peer Comparison

PACRA is now valued at 7x FY26F P/E, representing a 30% discount to the peer average of 10.5x, reflecting its smaller fleet size. The company’s price performance has also been notable, with a 25% absolute return over the last twelve months and a current market capitalization of US$56.86m (S$72.95m).

Balance Sheet and Key Ratios

PACRA’s balance sheet remains solid, underpinned by strong net cash and improving returns.

Vessel Portfolio: Details and Current Deployment

Crew Transfer Vessels (CTVs) – Taiwanese JV Mainprize Asia (49% stake)

ESG: Sustainability and Risk Management

PACRA is committed to sustainability, with notable achievements in emission management. Key highlights:

• Reduced Scope 1 and 2 emissions by over 56% in FY2023 vs. FY2022
• Set targets for 2030: 30% reduction in net emission intensity, 50% revenue from low-carbon/renewable activities, and 50% reduction in energy consumption intensity
• Emission intensity increased from 0.0024 to 0.0026 due to revenue declines or operational inefficiencies
• Energy consumption fell 8% yoy
• Continued investment in safety training and incident management

PACRA’s shift towards renewables is expected to unlock new revenue streams and mitigate regulatory compliance and reputational risks. However, operational efficiency remains an area for improvement to maintain competitiveness.

Risks to Outlook

Key risks for PACRA include:

• Weaker-than-expected ship repair demand for the yard
• Lower-than-expected vessel fleet utilization affecting revenues

Major Shareholders and Stock Information

• Pang Yoke Min: 62.8%
• Pang Wei Kuan: 3.1%
• Pang Wei Meng: 1.2%
• Free float: 31.7%
• Current shares outstanding: 1,449m
• Market cap: US\$56.86m (S\$72.95m)
• Bloomberg: PACRA SP | Reuters: PACI.SI

Conclusion: PACRA Positioned for Growth with Strong Re-Rating Catalysts

With a renewed fleet, rising margins, expanding renewable energy exposure, and a robust financial profile, Pacific Radiance is well-poised for further upside. The company’s sustainable profit turnaround, substantial margin improvement, and ongoing vessel additions are expected to drive a strong re-rating. The revised target price of S$0.09 represents a compelling 80% upside from current levels, making PACRA a standout turnaround and growth story in Singapore’s offshore & marine sector.

Peer Coverage: Full List of Covered Companies and Key Metrics

Additional companies covered in the broader peer analysis (not rated here) include ASL Marine, Kim Heng, Nam Cheong, Wintermar Offshore, Logindo Samudramakmur, Sillo Maritime Perdana, Sealink International, Marine & General, Lianson Fleet Group, Perdana Petroleum, Sea1 Offshore, Tidewater Inc, Helix Energy Solutions, Subsea 7, SEACOR Marine Holdings, with key metrics provided for context.

Investment Ratings Framework

• Add: Total return expected to exceed 10% over the next 12 months
• Hold: Total return expected between 0% and 10%
• Reduce: Total return expected to fall below 0%

The outlook for Pacific Radiance is bullish, with the turnaround momentum, strong financials, and strategic focus on renewables making it a compelling choice for investors looking to capitalize on the offshore & marine sector recovery.