Pacific Radiance

UOBKayhian on 27 Feb 2014

FY14F PE (x): 9.0
FY15F PE (x): 7.5

Above our expectation. Pacific Radiance reported a net profit of S$56.8m (+76% yoy)
for 2013. This was above our forecast of S$55m, primarily due to higher-than-expected
gains from vessel sales. Pacific Radiance registered gains of US$15.7m from vessel
sales in 2013, of which US$3.7m was made in 4Q13. We had assumed zero gains in
4Q13. The full-year gains of US$15.7m are in line with management's guidance on
sustainable annual gains of US$15m-20m from vessel sales. We are also pleasantly
surprised by the declared final DPS of 2.0 S cents.

We raise our target price from S$1.19 to 1.22, pegged at 9.5x 2015F PE, in line with the
long-term (2004-current) 1-year forward PE mean of 9.5x for the OSV-owner segment.
However, with Jaya’s businesses sold at 13-14x 2014F PE and a strong possibility that
POSH listing may be executed at higher valuations, this may justify a higher PE
multiple than 9.5x for Pacific Radiance