Tuesday, November 25, 2014
Riverstone: Maybank-KE reiterates Buy on Riverstone with TP $0.97 after hosting an NDR with institutional clients in Malaysia. The company commands dominance, good reputation and strong client relationship in the high-end cleanroom glove market and better-than-expected penetration in the low-end cleanroom glove market. There are strong barriers to entry into the niche high-end industry, which includes strong relationships formed through direct supplies, ability to customise solutions, best-in-class product features, as well as stringent qualifications. Better-than-expected penetration in the lower-end segment provide upside to earnings estimates. Management believes it can sustain its ASPs and margins through: 1) constant customisation and innovation to offer product differentiation, 2) serving quality rather than cost conscious customers. The stock is now trading below peer average and is valued at 15x FY15E P/E, on par with peer average.