Pacific Radiance

Pacific Radiance: UOBK expects 3Q14 earnings to be softer q/q, due to the dry docking of one DSV. As a results Pacific Radiance's fleet utilisation was lower in Jul-Aug, and gross margin should be significantly lower than 1Q14's 40.2% and 2Q14's 44.3%. The vessel has now completed its dry docking and is ready to resume work. As such, Pacific Radiance's share price, in view of its strong 62% ytd performance, might see weakness in the near term. UOBK views this as a buying opportunity , as earnings are set to see a strong earnings uptrend from 2015 onwards. Five new vessels have been delivered in Jan-Jul 14. All in all, there will be 12 newbuild deliveries in 2H14 (including the three deliveries in July). Over the next two years, more than 20 vessels will be delivered. The house reiterates Buy with TP $1.76