CGS International
Date of Report: August 19, 2025

PACIFIC RADIANCE: A SUSTAINABLE TURNAROUND STORY DRIVING VALUE IN THE OFFSHORE & MARINE SECTOR

Table of Contents

• Executive Summary
• Financial Performance Overview
• Vessel Redeployment and Contract Momentum
• Expansion in Renewables and Shipyard Operations
• Valuation and Peer Comparison
• ESG and Sustainability Progress
• Detailed Financial Tables
• Peer Group Comparison
• Analyst Outlook and Risks

Executive Summary

Pacific Radiance (SGX: PACRA) has emerged as a notable turnaround play in Singapore’s Offshore & Marine sector. The company delivered robust revenue growth and margin expansion in the first half of 2025, underpinned by the full reactivation of its vessel fleet and a shift towards higher-margin ship management activities. With a strong balance sheet, net cash position, and aggressive expansion into the renewable energy support segment, Pacific Radiance is well-positioned for sustained profitability and further re-rating. CGS International reiterates an “Add” rating, raising the target price to S\$0.09, implying an 80% upside from current levels.

Financial Performance Overview

• 1H25 revenue reached US\$24.4m, up 28% YoY, aligning with 50% of the full-year forecast.
• Gross margin soared to 49% (vs. 32% in 1H24), driven by the successful reactivation of the last accommodation work barge and a favorable revenue mix skewed toward ship management.
• Core PATMI of US\$5.9m was ahead of expectations, beating the full FY25 forecast of US\$5.1m for the period.

Vessel Redeployment and Contract Momentum

• All vessels are now fully operational, contributing to a 31% YoY surge in ship leasing and chartering revenues to US\$9m in 1H25.
• Four vessels are currently deployed in the Middle East under 1-3 year contracts, benefiting from robust offshore support vessel (OSV) demand and upward pressure on charter rates.
• Excluding third-party charter revenue from 2024, the underlying uplift in revenue is estimated to be even stronger, highlighting the impact of the company’s own fleet reactivation.

Key Vessel Assets (Fully-Owned)

Expansion in Renewables and Shipyard Operations

• Renewable Energy Support: Pacific Radiance now operates four crew transfer vessels (CTVs) serving offshore wind farms in Taiwan. In 1H25, one new CTV was delivered to its Taiwanese JV (Mainprize Asia, 49% owned), with another pending sale agreement—potentially bringing the fleet to six units.
• Shipyard Segment: Shipyard revenues grew 12% YoY in 1H25, supported by higher repair volumes, while the yard’s newbuild capability was validated by the CTV delivery.

Key CTV Assets (Taiwan JV)

Valuation and Peer Comparison

• Target Price (TP) is raised to S\$0.09, based on 7x FY26F P/E—a 30% discount to the peer average (10.5x), reflecting Pacific Radiance’s relatively smaller fleet size.
• FY25F-27F core PATMI estimates have been sharply upgraded, now expected at US\$13m–15m (vs. prior US\$5m–8m), on the back of higher gross margin assumptions (49–50%, up from 37–40%).
• Stock catalysts include new vessel additions, sale or contract for the second CTV under construction, and higher-than-anticipated charter rates.
• The company holds a net cash position of US\$15m as of end-1H25, supporting future growth and resilience.

Key Shareholding and Market Data

• Market Cap: US\$56.86m (S\$72.95m)
• Current Price: S\$0.05
• Target Price: S\$0.09 (up from S\$0.07)
• Free Float: 31.7%
• Major Shareholders: Pang Yoke Min (62.8%), Pang Wei Kuan (3.1%), Pang Wei Meng (1.2%)
• Average Daily Turnover: S\$0.04m

ESG and Sustainability Progress

• Pacific Radiance has demonstrated a strong commitment to sustainability, aligning with global and national environmental targets.
• Key achievements include a 56% YoY reduction in Scope 1 and 2 emissions in FY23 (from 3,356.86 to 1,457.52 metric tonnes).
• The company has set 2030 targets: a 30% cut in net emission intensity, 50% of revenue from low-carbon/renewable activities, and a 50% reduction in energy consumption intensity (baseline: 2022).
• ISO 14001 and IMO environmental standards are adhered to, but emission intensity rose marginally from 0.0024 in FY22 to 0.0026 in FY23, mainly due to revenue declines or operational inefficiencies.
• Ongoing investments in safety training and incident management reinforce workplace safety, crucial in a climate-disrupted environment.
• Increasing exposure to renewables is seen as a critical value driver and mitigant against future regulatory and reputational risks.

Detailed Financial Tables

Peer Group Comparison

• On key valuation metrics, Pacific Radiance trades at a significant discount to peers on P/E, yet demonstrates one of the fastest forecasted EPS growth rates and solid ROE improvement.
• Other Singapore-listed peers covered include Marco Polo Marine and Mermaid Maritime, both rated “Add” with higher market capitalizations but slower EPS growth than Pacific Radiance. Several other regional OSV and marine support players are also listed for benchmarking.

Analyst Outlook and Risks

• CGS International maintains an “Add” call, underpinned by a sustained profit turnaround, strong net cash, and an actively contracted fleet.
• Further re-rating could be catalyzed by additional vessel acquisitions, successful sale or deployment of the second CTV, and higher-than-expected charter rates.
• Key downside risks: Weak demand for ship repair at the yard and lower-than-expected fleet utilization, both of which could negatively impact revenues.
• On the ESG front, while the company is a proactive adopter of sustainability standards, it must continue to improve energy efficiency and emissions intensity to maintain its competitive edge and stakeholder trust.

Conclusion

Pacific Radiance is on a clear path to sustainable growth, leveraging a rejuvenated fleet, strong contract momentum, and expansion into renewables. With an attractive valuation, robust balance sheet, and a strategic focus on ESG, the company stands out in the Singapore offshore & marine space for both value and future growth potential.