Riverstone

Riverstone: DMG-OSK initiates at Buy with TP $1.05, based on the 16.3x industry average blended forward FY13/14 P/E. The positives for this hidden gem are: i) booming demand and its expanding capacity make for an exciting growth story, ii) it is deeply entrenched in a niche business, and iii) solid management and financials. If the company achieves its plan of expanding to an annual production capacity of 8.0bn pieces in FY19, expect its earnings to grow at a CAGR of 22.4% starting from FY13, up more than 4.1x to MYR163.4m by then. Riverstone is trading at a 12x forward P/E, the cheapest vs the 16.3x industry average, and 0.8x forward P/BV vs the industry average of 3.3x. It well also provides the highest yield.