- With above 100% payout and robust RM602m net cash, dividends remain attractive at an estimated 2026F yield of 7.3%, offering a good entry level at current Riverstone's share price.
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AI-related demand to drive cleanroom glove recovery.
- The cleanroom segment remains Riverstone’s key earnings driver, contributing around 40% of revenue but nearly 70% of gross profit.
- Management expects around 10% q-o-q volume growth in 3Q25, supported by stronger demand from the semiconductor and AI-driven data-storage industries. Customers such as Seagate and Western Digital are increasing output of hard disk drives and NAND devices, which in turn is lifting glove consumption.
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Softer raw material costs provide margin relief.
- Based on our channel checks, nitrile latex prices have eased by 3-6% q-o-q, while prices of key feedstocks acrylonitrile and butadiene have declined 3-4% q-o-q. These should translate into 1-2ppt gross margin uplift in 3Q25.
- As glove ASPs are typically set with a two-month lag, Riverstone is likely to capture most of this benefit in 3Q25, before customer pricing fully adjusts.
Healthcare margins to edge up.
- Read more at SGinvestors.io.
