Riverstone Holdings

Re: Riverstone Holdings

Postby winston » Fri Nov 06, 2015 10:47 am

not vested

On Track For a Record Year

Riverstone delivered a stellar set of results with PATMI surging 114% YoY to MYR35.3m on the back of MYR150.6m in revenue (+46.7% YoY) due to lower-than-expected opex.

Maintain BUY with a higher SGD2.35 TP (from SGD2.25, 12% upside). Going forward, we expect the cleanroom wing to remain the profit driver. 4Q15 PATMI is expected to be 10% softer QoQ due to pricing pressure on its healthcare business.

3Q15 results beat expectations. Riverstone delivered a stellar set of results with PATMI surging 114% YoY to MYR35.3m on the back of MYR150.6m in revenue (+46.7% YoY). The strong result was attributable to the lower-than-expected opex ie sales, general & administrative (SG&A) expenses, as the company managed to keep its costs in check despite its fast expansion.

Cleanroom to stay as the key profit driver. As we have previously pointed out, what really sets Riverstone apart from its Malaysian healthcare gloves original equipment manufacturer (OEM) peers is its niche cleanroom business.

Management expects this business to grow at 10% pa, as it chooses to only deal with customers that are reputable and with favourable credit terms, though this implies that the healthcare OEM business is likely to absorb the bulk of the new capacity,

The cleanroom division can still surprise on the upside with better-than-expected demand, given that the production line is fungible. We expect Riverstone’s cleanroom business to contribute 70% of profits and 30% of revenue.

Raising forecasts and TP. We now expect Riverstone to report a slightly softer 4Q15 results with PATMI declining 10% QoQ. This is as its healthcare OEM business remains under ASP declining pressure. We lift our full-year earnings estimates for FY15 and FY16 by 3.4% and 3.2% respectively. Our new TP of SGD2.35 is based on a DCFE valuation (CoE: 8.0%, TG: 2%).

Source: RHB

http://rhbosk.ap.bdvision.ipreo.com/NSi ... 8a89498d27
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Re: Riverstone Holdings

Postby winston » Mon Nov 09, 2015 9:25 am

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Riverstone Holdings (RSTON SP): Positive NDR - liquidity excitement; BUY TP SGD2.60

Investors impressed with Riverstone’s strong earnings beat. Management addressed investors’ dual concerns on possible slowdown of cleanroom segment and competition.

Remain positive on strong USD/MYR, demand for new capacity and 1-for-1 bonus issue to boost liquidity.

Maintain BUY & raise TP to SGD2.60 from SGD2.36. P/E target increased to 22x from 20x, to reflect higher average P/E target for peers.

Source: Kim Eng

https://factsetpdf.maybank-ke.com/PDF/C ... 022452.pdf
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Re: Riverstone Holdings

Postby winston » Mon Nov 09, 2015 9:29 am

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Strong 3Q results, but lofty valuation

At 73% of our full year forecast, 9M15 core net profit is deemed slightly above our expectations, as we expect a stronger 4Q driven by newly added capacity.

Reported net profit surged 114% yoy in 3Q15, due to
1) expanded capacity,
2) favourable FX translation and
3) low raw material price.

Gross profit margin (GPM) reached 5-year high, at 31.9% in 3Q15 (3Q14: 25.8%).

Raise FY15-17F EPS by 5-15% to reflect the favourable FX and raw material price.

Roll forward and raise target price to S$2.15 (CY17F P/E of 17.5x); downgrade to Hold.

Source: CIMB

https://brokingrfs.cimb.com/dE7p_F6mVDc ... 2Srnw2.pdf
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Re: Riverstone Holdings

Postby winston » Mon Nov 09, 2015 7:41 pm

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Riverstone declared a 3Q15 net profit of RM35.3m, which was up 114% y-o-y, as revenues grew 47% to RM150.6m on stronger demand.

Gross margins were bolstered y-o-y from 24% to 32% in 3Q15, as the company benefitted from strengthening of the USD, stable raw material prices and greater automation.

Riverstone completed Phase 2 of its expansion, which should boost production capacity to 5.2bn gloves by end-4Q15.

We raised FY15F/16F/17F earnings by 22%/12%10% on higher production and margin assumptions.

Maintain BUY, TP raised to S$2.49 as we roll forward our earnings base to FY16/17.

Source: DBS
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Re: Riverstone Holdings

Postby winston » Tue Jan 05, 2016 9:46 am

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Riverstone Holdings
BUY; Last Traded Price: S$2.40; RSTON SP
Price Target: S$2.83 (Upside 18%) (Prev S$2.49)

More room to grow

Lifting our 12-month TP to S$2.83 after raising FY16F/17F earnings by 4%/8% on higher USD/MYR forecasts and margin assumptions, and as we revise target valuation multiple from 18x to 20x blended FY16/17 PE as the sector has re-rated.

We have lifted our ASPs (in Ringgit terms) even as we expect some of the currency gains from a strengthening US$ to be passed on to customers, and have also raised margin assumptions slightly to account for better economies of scale ahead.

Strong performance to continue into 4Q15. Benefitting from low raw material prices, robust demand and as three new production lines were commissioned in 3Q15 – boosting production capacity by 13% to 5.2bn gloves, we expect top and bottom line to grow in 4Q15 by 55.8% and 62.0% to RM175m and RM36m respectively. This should bring FY15’s net profit strongly up 77% y-o-y to RM126m.

Capacity expansion to underpin future growth, with long-term upside from recent acquisition of adjoining land. Riverstone plans to double its annual capacity from 4.2bn gloves in 2014 to at least 8.2bn gloves by 2018 to support growth in both its cleanroom and healthcare glove segments, which could more than double earnings from RM71m in FY14 to RM172m by FY17.

Furthermore, Riverstone is able to grow capacity faster than expected as it recently acquired 9.364 acres of land for the construction of a factory and worker hostels.

Source: DBS
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Re: Riverstone Holdings

Postby winston » Tue Jan 05, 2016 1:54 pm

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We have lifted our 12-month TP for Riverstone Holdings to S$2.83 (Prev S$2.49) after raising FY16F/17F earnings by 4%/8% on higher USD/MYR forecasts and margin assumptions, and as we revise target valuation multiple from 18x to 20x blended FY16/17 PE as the sector has rerated.

Benefitting from low raw material prices, robust demand and as three new line to grow in 4Q15 by 55.8% and 62.0% to RM175m and
RM36m respectively.

This should bring FY15’s net profit strongly up 77% y-o-y to RM126m.

Maintain BUY

Source: DBS
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Re: Riverstone Holdings

Postby winston » Thu Feb 25, 2016 10:27 am

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We continue to like Riverstone (RSTON SP) after yet another solid performance.

The group is continuing its ambitious expansion plan and we reiterate our view that it would have no problem filling up additional capacity despite industry oversupply concerns.

Most notably, its niche cleanroom business held up well in terms of ASP and should continue to drive profitability going forward.

Maintain BUY with a new SGD1.18 TP (20% upside), adjusted for a 1-for-1 share split and implying 18.4x FY16F P/E based on DCFE valuations (8% CoE, 2% TG).

Source: RHB

http://rhb.ap.bdvision.ipreo.com/NSight ... 666defaef3
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Re: Riverstone Holdings

Postby winston » Fri Feb 26, 2016 11:04 am

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Valuation:

Maintain BUY; Lower Maintain BUY; Lower12-month TP to S$1. month TP to S$1. month TP to S$1.30.

As larger peers have de-rated to 21x CY16F PE, we revise our target valuation multiple for Riverstone from 20x to 18x blended FY16/17F PE, similar to its 12-month average.

Given its smaller capacity, the implied discount of 15% appears fair.

As an export play, we also like Riverstone as a beneficiary of a stronger US$ vs RM and its share price should further re-rate as earnings are delivered.

Source: DBS

https://researchwise.dbsvresearch.com/R ... hhihkfdhjg
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Re: Riverstone Holdings

Postby winston » Fri Feb 26, 2016 11:06 am

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Riverstone Holdings - Strong finish, still positive (BUY, TP SGD1.18, RSTON SP, Industrials)

FY15 core earnings slightly above expectations and increased by 72% YoY.

The robust growth was attributable to
1) c.40% increase in volume,
2) strong USD/MYR,
3) low material price and
4) improved efficiency.

Expect continued benefit from strong USD/MYR and low material prices.

Beyond capacity expansion, Riverstone is increasing its presence in US, adding new products and new customers.

Maintain BUY with TP of SGD1.18, Riverstone is attractively trading at 20% discount to peers’ average.

Source: Kim Eng

https://factsetpdf.maybank-ke.com/PDF/C ... a05563.pdf
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Re: Riverstone Holdings

Postby winston » Fri Feb 26, 2016 11:12 am

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2015: Solid Results; Attractive Again After Recent Pull-back

Net profit grew 78% on higher revenue growth as well as a 4.8ppt expansion in margins to 22.6%.

Riverstone’s expansion plans are on track and we expect its capacity to rise to 8.2b gloves by 2018 (from 5.2b as at 2015) to underpin a 3-year EPS CAGR of 14%.

We have raised our 2016-17 net profit forecasts by up to 7% and also upgraded our rating to BUY after the share price pull-back of 22% from its recent high.

We have a PE-based target price of S$1.23.

Source: UOBKH

https://research.uobkayhian.com/content ... 6b7c780f59
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