Pacific Radiance

Pacific Radiance: Pacific Radiance has secured a long term charter contract worth US$140m, including extension options, for one vessel- ahead of its expected delivery in 2016/17. The vessel will be chartered to a new client for offshore support services in a key emerging market. Just a week ago, the group posted a week set of 3Q14 results, although net profit grew 24% y/y to US$13.1m, on a 9% drop in revenue to US$44.4m, weighed by its subsea business (-22%) due to lower vessel utilisation and vessel dry-docking. The bottom line was boosted by disposal gains of US$11.5m, which offset weaker gross margin of 21.1% (-20.1 ppt). Post-results, majority of the street lowered its TP for the counter, on the back of the weak sentiment for oil and gas players due to the falling oil price environment. Bloomberg consensus has 7 Buys and 1 Hold rating for the counter, with 12-month TP of $1.43.