Riverstone - OCBC Investment 2024-12-03: Wearing Success

• Established in 1991 and listed on the Mainboard of the Singapore Stock Exchange in 2006, Riverstone (SGX:AP4) specialises in the production of cleanroom and healthcare gloves, finger cots, cleanroom packaging bags and face masks. Their products are qualified and widely used by major global players in the electronic and healthcare industries, exporting more than 80% of their products globally.

Earnings growth resumes after pandemic-driven boom.

• - Read this at SGinvestors.io -
• - Read this at SGinvestors.io -

However, gross margins contracted q-o-q from 40.2% to 34.7% due to rising raw material and labour costs.

Riverstone's net profit for 3Q24 increased by 22% y-o-y but declined by 0.5% q-o-q, primarily due to foreign exchange losses. In our view, the potential for ongoing policy changes in the US regarding tariffs, immigration, and taxes supports the expectation of a stronger US$ in the near-medium term.

Additionally, Riverstone's management remains optimistic about the medium-term outlook, anticipating the addition of 1.5b units of new capacity by 1Q25, which includes 700m cleanroom gloves and 800m healthcare gloves.

Favourable macro economic backdrop.

• Read more at SGinvestors.io.

Donovan Tan OCBC Investment Research | https://www.iocbc.com/ 2024-12-03 SGinvestors.io

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