Pacific Radiance

UOBKayhian on 4 Jul 2014

FY14F PE (x): 11.1
FY15F PE (x): 9.8
Mexico beckons. Pacific Radiance and Consultoria y Servicios Petorleros, S.A. de
C.V. (CSP) is forming a 49: 51 JV offshore support vessel chartering company, CR
Offshore S.A.P.I. de C.V. (CRO). Management said its Mexican JV partner is an
offshore support vessel (OSV) operator with a fleet of less than 10 chartered-in
vessels. Pacific Radiance’s strategy in Mexico will be similar to its JV in Indonesia via
Logindo, but it will proceed carefully as the conditions in Mexico are different. The
Mexican JV entity is looking to deploy more vessels in 2H14.
Maintain BUY and target price of S$1.55, based on 11.5x 2015F PE, which is about a
20% premium to the long-term (2004-current) 1-year forward PE mean of 9.5x for the
OSV- owner segment. Looking at the big picture, Malaysian stocks are the most
expensive, followed by international peers and then Singapore stocks. Indonesian
stocks are still the cheapest but are catching up.