Riverstone Holdings

[winston]

not vested

Higher ASPs on the cards

We reiterate our positive view on RSTON, as we believe higher ASPs are on the cards given the surge in glove demand.

We now impute 10%/15% ASP growth qoq for healthcare gloves in 2Q/3Q20F. Cleanroom glove prices could also trend up in 3Q20F.

We raise our FY20-22F EPS forecasts by 5.7-24.9%; TP is lifted to S$3.12.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 0A39607677

[winston]

not vested

Riverstone Holdings (RSTON SP)
Uptrend In ASPs Likely To Continue; Raise Target Price By 24.7%

As countries start to ease social distancing measures and reopen their economies, Riverstone is set to benefit from a rise in COVID-19 infections as second waves of infections have started to hit some countries.

The ASP uptrend is expected to continue until 4Q20 while upcoming capacity expansion is set to help absorb overwhelming demand.

Thus, we raise our 2020F EPS by 24.3% and PE-based target price by 24.7% to S$3.15 (23.1x 2020F PE). Maintain BUY.

Source: UOBKH

https://research.uobkayhian.com/content ... 586fa2f3d3

[winston]

not vested

Riverstone Holdings (RSTON SP)
Expect Outperformance Due To Rising ASPs; Raise Target Price By 14.1%

Recently, we had a call with Riverstone’s CEO to get a business update about the company’s performance in 2Q20.

We highlight three points made by Riverstone’s CEO:
a) demand for healthcare gloves remains robust;
b) positive surprise for ASP from new tier pricing; and
c) capacity expansion remains on track with the first production line commencing production in Jul 20.

We raise our 2020F EPS by 14% and PE-based target price by 14.1% to S$3.60 (based on an unchanged 23.1x 2020F PE).

Source: UOBKH

https://research.uobkayhian.com/content ... 16db6c83a2
Maintain BUY.

[winston]

not vested

Stronger price increases in 3Q20F

We reiterate our positive view on RSTON, as we believe the quantum of its ASP hike in 3Q20F could be higher than we previously expected.

RSTON will release its 2QFY20 results by early-Aug; we project a strong net profit of RM72m (+54% qoq, +102% yoy).

FY20-22F EPS raised by 1.6-25.1%; TP lifted to S$3.90.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 995CE36034

[winston]

vested

Riverstone Holdings outperforms with gloves in high demand, say analysts

SINGAPORE (Jul 9): Against the backdrop of the Covid-19 pandemic, cleanroom product manufacturer Riverstone Holdings, is seeing “outperformance” that is expected to continue into the next quarter.

UOB Kay Hian and CGS-CIMB, are maintaining “buy” and “add” on the company respectively, with the latter lifting the target price to $3.90 from $3.12.

The Singapore-listed company will release its 2QFY20 results by early-August. CGS-CIMB analyst Ong Khang Chuen projects a strong net profit of RM72 million ($23.51 million), at 54% q-o-q and 102% y-o-y.

Citing a call with Riverstone Holding’s CEO, UOB Kay Hian analysts Llelleythan Tan and John Cheong expect demand for healthcare gloves to remain robust beyond 2Q2020; a rise in average selling price (ASP); and ample capacity expansion, with the company’s first production line commencing production this month.

“As more countries start to experience [a] second wave of Covid-19 infections, demand for healthcare gloves continues to increase and customers have offered to pay higher prices to secure inventories,” said UOB Kay Hian in a Jul 7 report.

ASP for healthcare gloves are expected to increase by around 10% every month until August then maintaining in September, though CGS-CIMB expects growth in July to taper in the subsequent month, at 20% and 8% m-o-m.

Overall, the “favourable” ASP environment is expected to continue up to 1H2021, “based on customers’ strong indicative demand”, notes UOB Kay Hian.

Riverstone Holdings’ ASP for healthcare gloves have also been given a surprise boost by a new tier pricing for Riverstone’s regular healthcare glove customers (RC), notes UOB Kay Hian.

This month, Riverstone introduced a new tier pricing system for its regular customers. Instead of paying US$25 per thousand pieces for 100 million pieces, regular customers pay US$25 per thousand pieces for the first 40 million pieces.

These customers then pay a mark-up of US$27 per thousand pieces for the subsequent 40 million pieces, and spot prices between US$60-70 per thousand pieces for the remainder of their order.

This new tier system was proposed by regular customers and not Riverstone Holdings, reports UOB Kay Hian.

“As most of Riverstone’s regular customers are glove distributors with hospitals as end-clients, we believe this shows the growing unmet demand for healthcare gloves if regular customers are willing to pay spot prices to ensure they have stock,” say Tan and Cheong.

The company is also making strides on the supply side. After a pause in its capacity expansion in 2Q2020 owing to Malaysia’s movement control order, Riverstone Holdings is expected to commission new production lines gradually starting July, notes CGS-CIMB in a Jul 8 report.

This month, the company will see a single line start production, and a double line will be commissioned every month from August to December this year, reports UOB Kay Hian.

“We estimate [Riverstone Holdings’] total annual production capacity will grow 8% in 2H2020F to 10.6 billion pieces. Additional capacity from the new lines would be sold at spot prices, in our view,” says Ong.

Source: The Edge

https://www.theedgesingapore.com/capita ... y-analysts

[winston]

vested

BUY
Last Traded Price ( 14 Jul 2020): S$3.10 (STI : 2,620.19)
Price Target 12-mth: S$3.90 (26% upside) (Prev S$3.09)

What’s New
Orderbook full till next year, thanks to COVID-19
Expect ASP increase of 45% y-o-y for healthcare and 10% for cleanroom in FY20F; flat in FY21F
Higher margins, as the ASP hikes more than offset the slight increase in costs
Maintain BUY with higher TP of S$3.90

Source: DBS

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

[winston]

not vested

Malaysian glove-maker Riverstone Holdings posted a 119.3-per-cent surge in net profit to RM137.5 million (S$45.27 million) for the six months ended June, driven by the spike in global demand for its health-care examination gloves, clean-room gloves and face masks.

With stronger sales, the mainboard-listed company recorded a 30.5-per-cent jump in revenue to RM626.7 million in H1.

As a mark of confidence and to reward shareholders, Riverstone has declared an interim dividend of 4.00 sen, up from 1.55 sen for the same period last year.

Source: Phillips

[behappyalways]

Riverstone raises interim dividend to 4 sens after 119.3% surge in 1H2020 earnings
https://www.theedgesingapore.com/capita ... 0-earnings

[winston]

not vested

Just a warm-up stretch

2Q20 net profit of RM91m (+95% qoq, +180% yoy) was above expectations, as we previously forecasted RM72m net profit for the quarter.

We expect ASP for both healthcare and cleanroom gloves to trend up further till end-CY20, given urgent glove demand globally.

We forecast sequentially stronger net profit of RM130m (+43% qoq, +264% yoy) in 3Q20.

Reiterate Add, with a higher TP of S$5.55 (24.1x CY21 P/E).

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 8E909E6976

[winston]

not vested

Riverstone Holdings (RSTON SP)
1H20: Expect A Much Stronger 2H20; Raise Target Price By 67% To S$6.00

1H20 net profit grew 119% yoy due to higher ASPs and robust glove demand, meeting
33% of our 2020 forecasts.

We understand that the profit for Jun 20 was much higher than that of Mar and Apr 20 as the aggressive ASP hikes only started in Jun 20.

We expect 2H20 net profit to grow by 120% hoh due to robust ASPs.

We raise our 2020 and 2021 net profit forecasts by 41% and 83%, respectively. We also roll over our valuation base to 2021 (23.2x 2020F PE). Maintain BUY. TP 6.00

Source: UOBKH

https://research.uobkayhian.com/content ... f5dc9589a1