Monday, May 9, 2016

Riverstone

Riverstone, Following 1Q results that missed last week, Maybank KE is downgrading to Hold (TP $0.97), while CIMB is downgrading to Reduce (TP reduced to $0.91, from $1.07).

The risk going forward is further margin compression, which we saw in the quarter, due to a fall in volumes of high-margin cleanroom gloves, and FX. Looking ahead, cleanroom glove demand is expected to be subdued in 2Q16, due to reduced demand from HDD and flat panel display customers. Demand should pick up in 2H16 however.

Specifically, CIMB recommends to take profit, and revisit the counter when gross margin stabilizes.

No comments:

Post a Comment