Riverstone

Riverstone: DBSV also features Riverstone in this month's small mid caps radar. While the rubber glove industry may be swarmed by an influx of new capacity over the next few years, Riverstone appears to be a shimmering gemstone embedded in a muddy riverbank. The company is enjoying the favourable industry shift towards nitrile gloves and is gaining market share in the relatively inelastic high-end cleanroom gloves. The stock is trading at a 20% discount to its Malaysia peers, which is unwarranted given its stronger ROE and growth profile. DBSV expect the commencement of new production lines to drive earnings growth in 2H, and a re-rating of stock valuation closer to peers. Apart from the potential revaluation gain, Riverstone offers an attractive dividend yield of 4-5%.