Towards Financial Freedom
Riverstone Holdings - Record Performance
Riverstone's 3QFY13 results beat our expectations, with PATMI of MYR15.69m (+49.3% y-o-y) and topline revenue of MYR93.99m (+18.9% y-o-y), underpinned by its capacity expansion and growing demand for its products. The group is on track for a strong FY13 performance and beyond. Reiterate BUY, with a SGD1.05 TP, based on 16.3x industry average blended forward FY13/14 P/E.
- Record performance. Riverstone posted record 3Q13 results, underpinned by the expansion in its production capacity and overall growing demand for its products, particularly in the healthcare gloves segment. Net margins increased by 3.4 ppts y-o-y to 16.7%, higher than our FY13 full-year estimates of 15.4%, mainly attributed to: i) a higher utilisation rate (91%), ii) favourable raw material prices, and iii) a reversal of forex losses of MYR1.1m in 3Q12 to a gain of MYR0.2m in this quarter.
- Solid outlook as growth story plays out. Nitrile gloves, which remove the problem of latex sensitivity, continue to gain popularity and are expected to grow by 14% globally. This should boost growth for its healthcare products. Meanwhile, we expect robust demand for its cleanroom products given the stable hard disk drive outlook as well as favourable prospects for the semiconductor and wireless devices sector. With its current production plant now at full capacity, the group is currently building a new site, with 1.0bn pieces/annum of additional capacity expected to come online in 2HFY14, thus providing support for future growth.
- Proposed delisting of Medi-flex supports undervalued thesis. The recent delisting offer by Top Glove (TOPG MK, NEUTRAL, TP: MYR6.34) of its indirect 80%-owned Singapore-listed subsidiary Mediflex values the latter at 14.5x FY13 P/E (SGD1:MYR2.56). Despite trading at a lower FY13 P/E, Riverstone, which boasts about 10x larger net cash hoards, is expected to generate twice the profit. The group's essential nitrile manufacturing know-how - especially in the cleanroom space - coupled with its growth potential, will make it a favourable target for acquisition.
Financial Exhibits
SWOT Analysis
Company Profile
Riverstone Holdings specialises in producing and selling nitrile gloves used in the clean-room manufacturing and healthcare industry.
Riverstone Holdings specialises in producing and selling nitrile gloves used in the clean-room manufacturing and healthcare industry.
Recommendation Chart
Source: OSK
Related Stocks
| Chart | Stock Name | Last | Change | Volume |
|---|
Market Buzz
More articles on Towards Financial Freedom
Duty Free International Ltd. - A duty-free giant in the making
Created by kiasutrader | Oct 17, 2016
Cityneon Holdings - 'Avengers' showcasing in the Land Down Under
Created by kiasutrader | Jun 07, 2016
Discussions
Be the first to like this. Showing 0 of 0 comments
Post a Comment
Featured Posts
Latest Videos
Apps
Top Articles
1
SGX Market Updates
US Magnificent Seven Stock DLCs Introduced for Asian Market Hours
2
RHB Investment Research Reports
3
SGX Market Updates
4
5
CEO Morning Brief
Keppel DC REIT Buys Data Centres in Singapore’s Genting Lane for S$1b
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Featured Advertisers / Partners
Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
