Riverstone Holdings

[winston]

not vested

Gloves juggernaut creates fifth billionaire as skepticism grows

by Yoojung Lee

(Aug 17): Malaysia has long been a place where vast fortunes have been amassed over time. The Kuoks, Tehs and Queks are custodians of palm oil, property and banking empires that stretch back decades.

That was until Covid-19, when the country’s low-key rubber industry -- or more precisely, glove making -- became one of the hottest on the planet.

Wong Teek Son, who co-founded Riverstone Holdings Ltd. in the 1980s after working as a research chemist, last month became the fifth billionaire in the country from manufacturing gloves. He’s now worth US$1.2 billion as shares of his company rallied almost sixfold from a low in March, thanks to growing demand for protective products during the coronavirus pandemic.

A Riverstone spokesman declined to comment on Wong’s net worth.

The speed and strength of the gloves boom has been extraordinary, but there are signs the rapid rise could reverse, especially as research for a Covid-19 treatment and vaccine progress.

Glove companies were hammered last week when Russia’s president said his nation had cleared the world’s first Covid-19 vaccine for use, while Moderna Inc. and Johnson & Johnson are among those reaching deals with governments to supply their shots. Riverstone slumped 13% in its worst week since March.

Even though a vaccine may not result in lower demand for gloves, investors may sell their shares in anticipation that it’ll reduce the number of cases, RHB Research Institute analyst Alan Lim noted in an Aug. 13 report.

When it comes to gloves making, Malaysia is king: It produces about 65% of the world’s supply for rubber gloves, and the Plantation Industries and Commodities Ministry estimates exports will climb 45% this year.

Riverstone peers Top Glove Corp. and Hartalega Holdings Bhd. are now among the five most-valuable companies on Malaysia’s equity benchmark index. Their shares have jumped more than 192% this year, lifting the net worth of their billionaire founders, according to the Bloomberg Billionaires Index.

Fortunes in the country are booming even as the economy contracted by the most since the Asian financial crisis. That’s exacerbating already wide inequality. Knight Frank estimates wealth creation is the 10th fastest in the world -- while the mean income was 7,901 ringgit (US$1,882) last year. The firm’s 2020 wealth report projected that the number of Malaysians with more than US$30 million will swell by 35% between 2019 and 2024, compared with 2% between 2018 and 2019.

Unlike its rivals, when Riverstone decided to go public in 2006, it picked neighboring Singapore. That’s because Malaysia had stricter currency controls and the funds raised in the city-state were more easily transferable to China and Thailand, where the company was expanding, according to its spokesman.

Riverstone has an annual production capacity of about 9 billion gloves, according to its latest annual report. Its profit more than doubled to 137.5 million ringgit in the first half of the year.

Wong co-founded the maker of nitrile gloves in 1989 after working as a research and development chemist in a company that supplied cleanroom products. He hadn’t planned to venture into building his own business.

“The opportunity presented itself only because the company I worked for shut down, and we were able to use their production lines,” he said in an interview with the Singapore Exchange in 2016. With the competition being strife, many peers in Malaysia had to close down. “We realized we needed to provide a service to our customers.”

Source: The Edge

https://www.theedgemarkets.com/article/ ... cism-grows

[winston]

vested

Riverstone Holdings

Between Sept 25 and 30, Riverstone Holdings executive chairman and CEO Wong Teek Son acquired 226,000 shares of the listed company for a consideration of S$793,200.

At an average price of S$3.51 per share, this increased his total interest in Riverstone Holdings from 51.05 per cent to 51.08 per cent.

This followed his acquisition of 57,000 shares at S$3.49 per share on Sept 24.

Mr Wong is the founder of Riverstone and appointed to the board as executive chairman on Aug 3, 2005. He has been instrumental in expanding the group's customer base and cementing business relationships with its international customers.

Mr Wong's executive responsibilities include developing business strategies and overseeing the group's operations.

On Sept 25, Riverstone Holdings filed an updated corporate presentation on the SGX company announcements page highlighting management's plan to increase production capacity by 1.0 billion to 1.5 billion pieces of gloves every year.

Source: Business Times

[winston]

vested

Corporate Presentation

Summary:-

1. Average selling prices of healthcare examination gloves have increased approximately 10.0% month-on-month since June 2020

2. Positive impact of the price increases will be reflected in 3QFY2020 and 4QFY2020

3. Cleanroom gloves growth >30.0% in 1HFY2020, with this increasing trend expected to persist through 3QFY2020 and 4QFY2020

4. Overall, average selling prices of healthcare and cleanroom gloves is expected to continue trending upwards due to strong demand

5. Expansion plans remain on track, with four more double lines to be commissioned each month from September 2020

6. The Group will add another seven double lines in 2021, with the first line of this new phase ready in April 2021

7. All of the capacity from the new seven double lines for 2021 have already been taken up by customers


https://links.sgx.com/FileOpen/Riversto ... eID=632800

[winston]

not vested

Riverstone Holdings (RSTON SP)
Cleanroom Gloves Benefit From The COVID-19 Pandemic And Tech Boom

Riverstone is still experiencing surging demand for its healthcare and cleanroom gloves.

ASPs for both segments have soared and would see a 15% mom hike in Nov 20 (from 10% mom each in Aug-Oct 20).

Riverstone’s cleanroom segment has also benefited from the COVID-19 pandemic and tech boom.

We increase our 2020-21 EPS forecasts by 15% and 46% respectively.

Maintain BUY with slightly lower PE-based target price of S$5.97, pegged to 15.9x 2021F PE (previously 23.2x).

Source: UOBKH

https://research.uobkayhian.com/content ... d7bb0abe1d

[winston]

vested

Diamond In The Rough; BUY

Buy
Target Price (Return): SGD5.45 (+50%)
Price: SGD3.64
Market Cap: USD1,986m
Avg Daily Turnover (SGD/USD) 18.2m/13.4m

Initiate coverage with a BUY and DCF-derived SGD5.45 TP, 50% upside with c.3% FY20F yield.

Our TP, which implies 12.7x FY21F P/E, is close to its 13.4x average P/E and at a 29% discount to the sector average.

The discount reflects its smaller market cap and lower liquidity.

We expect FY20F earnings to surge 262% YoY, followed by another 105% in FY21F, supported by rising ASPs and a 42% capacity expansion between FY19 and FY22F.

Source: RHB

https://research.rhbtradesmart.com/view ... a4e2069cec

[winston]

vested

Malaysia glove maker Riverstone Holdings on Monday announced that its net profit had grown five times to RM178.6 million (S$58.2 million) for its third quarter ended Sept 30, unhampered by rising packaging and raw material costs.

Revenue rose 92 percent to RM482.3 million, due to the surge in global demand for personal protection equipment amid the Covid-19 pandemic, which led to higher average selling prices of the group's healthcare examination gloves since June this year.

Source: Phillips

[winston]

vested

Riverstone reports strong 3Q20 performance with 92% y-o-y jump in revenue

by Lim Hui Jie

Riverstone Holdings has reported a 3Q20 revenue figure of RM482.3 million ($157.2 million) for 3Q2020, a jump of 92% as compared to the same period last year.

The surge in average selling prices of glove products has led to a 389.6% y-o-y increase in gross profit to RM251.6 million for 3Q2020.

The Group’s blended gross profit margin expanded 31.7 percentage points yoy to 52.2% for 3Q2020.

Cash and cash equivalents amounted to RM427.3 million

Source: The Edge

https://www.theedgesingapore.com/news/r ... paign=FREE

[winston]

Riverstone Holdings (RSTON SP)
3Q20: Robust Results; Expect A Strong Finish For 2020

Riverstone reported exceptionally strong 3Q20 results with revenue and net profit surging on higher ASP and overwhelming demand.

9M20 revenue and net profit formed 60% and 62% of our full-year forecasts respectively.

The second wave of infection has sent ASP higher as demand continues to outpace supply.

Cleanroom gloves ASP benefitted from a lack of supply.

Phase 6 capacity expansion is almost completed.

Maintain BUY and PE-based target price of S$2.99 (ex-bonus issue).

Source: UOBKH

https://research.uobkayhian.com/content ... 685b166274

[winston]

vested'

Vaccine news overshadows results

3Q20 net profit of RM179m (+96% qoq, 5-fold increase yoy) was 37% above our expectations, due to stronger-than-expected ASP increase.

Fundamentals remain solid with further ASP hikes, but recent vaccine newsflow could place a short-term dampener on the share price.

However, there remain multiple hurdles to widespread availability of Covid-19 vaccines. Reiterate Add, with lower TP of S$2.50 (17.0x CY22F P/E).

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... d0b4afd221

[winston]

vested

What’s New

Downgrade to HOLD as we believe the positives are mostly priced in; expect ASP trend to stabilise in FY21F and decline in FY22F

3Q20 results above expectations on strong demand and high ASP

Expect a strong 4Q20; raised FY20F/FY21F earnings forecast by 70%/62% on strong ASP surge

TP of S$2.03, pegged to average 5-year PE, in line with our valuation peg for peers.

Source: DBS

https://researchwise.dbsvresearch.com/R ... =fieihkhea