Friday, June 12, 2015

Pacific Radiance

Pacific Radiance: CIMB calls it a high conviction Buy, saying it’s one of the few SGX-listed OSVs trading below estimated liquidation value. Essentially, what sets Pacific Radiance apart from most of its peers, when it comes to realizable value is that its fleet is younger, mainly shallow-water and diversified, which translate to its higher realizable value relative to fleets which are more bespoke and sophisticated tonnage.

A pushback argument is that OSVs are commoditized and oversupplied, and not a good offshore asset-class to own, but the house underscores that the OSV market is now at a through and it views further downside is limited.

The house has a $0.85 TP, or a 20% discount to liquidation value

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