Pacific Radiance

Pacific Radiance: UOB Kay Hian initiates coverage with a Buy rating and $1.19 TP. Radiance: Pacific Radiance is principally an offshore support vessel provider in the oilfield services industry. The group is managed by a team of industry veterans headed by Executive Chairman Pang Yoke Min, who is noted for co-founding Jaya Holdings and was its Managing Director from 1981 to 2006. Under Pang’s stewardship, Jaya Holdings grew to be Asia’s largest OSV builder in the last oil cycle. Pacific Radiance’s key competitiveness lies in its virtuous-cycle OSV business model. 1) It has the right vessels in its fleet. This is achieved through its market-savvy fleet renewal and management strategy; 2) It acquires vessels at a cost that is lower than open-market prices. This is made possible by its strong relationships with proven third-party OSV shipyards, while key vessel equipment for new vessels is sourced directly from international suppliers; 3) It is well-positioned in high-growth markets. These include the subsea services market as well as high-barriers-to entry cabotage offshore O&G countries such as Indonesia, Malaysia and South America.