Riverstone Holdings

I hv noticed lately that the share price of all the glove manufacturers is moving in tandem to the RM. RM goes up glove manufacturers share price goes down n conversely. So it depends on what is your call on the RM now. Sound silly with this 1 dimensional investment thesis but that's how mr mkt is behaving in this irrational volatility.

I think it is a mistake to treat RS just like any other glove manufacturers. Sure they face the same macro issues but you need to understand their biz model(see earlier threads). They hv a much resilient biz model then the rest ie their impact will not be as much.

(17-02-2016, 03:47 PM)Jacmar Wrote: I hv noticed lately that the share price of all the glove manufacturers is moving in tandem to the RM. RM goes up glove manufacturers share price goes down n conversely. So it depends on what is your call on the RM now. Sound silly with this 1 dimensional investment thesis but that's how mr mkt is behaving in this irrational volatility.

I think it is a mistake to treat RS just like any other glove manufacturers. Sure they face the same macro issues but you need to understand their biz model(see earlier threads). They hv a much resilient biz model then the rest ie their impact will not be as much.

I agree, RS is one of the "resilient" companies, but short-term impact is inevitable, once market turns ugly. The same as Keppel Corp, amid the Oil price crisis.

(not vested, interested in the company, but not at current price)

Extract of Chairman letter in AR 2015

Our ongoing strategy remains on providing customised solutions to our customers rather than a player focused on mass production. For example, we have developed new cleanroom gloves suitable for the mobile, tablet and LCD manufacturing segments. These gloves demand different physical properties such as its focus on corrosion as compared to the gloves for use in industries such as HDDs and semiconductors. This new line of gloves has been gaining traction globally and allows us to enhance our market leading position in the cleanroom glove segment. In line with this approach, we are pleased to share that we have been making significant progress in penetrating new niche glove markets, particularly in the US. Supported by our strength in product customization and the flexibility of our manufacturing facilities, we have successfully gained momentum within the region.

Anticipating industry trends for a sustainable outlook.  Encouraged by the positive market feedback for both our cleanroom and healthcare gloves, we have begun construction of Phase 3 which will add another one billion gloves to an annual production capacity of 6.2 billion glove pieces by 2016. We target commissioning the first production line by the third quarter of 2016 and complete the entire phase by the end of 2016. As a result of our strong balance sheet and ability to generate positive operating cash flows, all three expansion phases are internally funded. In addition to our ongoing expansion plans, we also acquired a new piece of land measuring 9.4 acres located at Kamunting Raya Industrial Estate, which is beside our existing plant in Taiping, Malaysia. This land will house a workers hostel and a potential new factory to support further business expansion beyond FY2018. Despite the positive developments during FY2015, the global glove industry remains challenging as we face rising costs stemming from areas such as operations, labour and energy. Tight competition is also expected for the coming years. In order to tackle the economic uncertainties, we strive for continuous innovation within our dual engines of growth in cleanroom and healthcare gloves while ensuring optimal efficiency of our manufacturing processes.

------------------------------------

My thoughts -

1.  Interesting to me that the chairman make special mention of significant progress in US market penetration.  For the Year 2015, the key revenue driver is Europe (65%), Malaysia (72%) and Other parts of Asia (23%).  Seems to suggest that Rest of World (which house US) with sales contribution of 12% will gain traction and importance in the coming years.

2.  At the end of Phase 5, Riverstone will be looking at 8.2 billion glove capacity in Year 2018, with this 9.4 acres new land, potentially add another 1 billion beyond 2018. 

3.  A review of last 3 years of chairman letter, the same challenges are being highlighted, that of more intense competition, cost pressure (labour+utilities), raw material cost and currency exposure, but management has been able to deliver improving GM%.  Moving forward, growth will be less subtle (given its bigger base), but is it still good enough for the shareholders at the current price?

vested

The analyst's view is different from MARGMA's view. The production cost, will continue to increase, while ASP hike is restricted by competition. Let's see the ASP market trend...

(not vested)

Gas price hike minimal impact on glove makers

KUALA LUMPUR: CIMB Equities Research expects 5.96% increase in the average gas tariff for non-power sectors, which comes into effect on July 15, to have a minimal impact on glove makers.

“The hike was expected by the glove industry and glove manufacturers have already raised prices to account for the increase,” it said on Thursday, adding the hike would have minimal impact on the sector’s earnings as it retained its Overweight call.

Gas Malaysia announced the average gas tariff for these sectors would be increased by RM1.52 (5.95%) to RM27.05 per MMbtu.
...
http://www.thestar.com.my/business/busin...ve-makers/

Financial Results for the year ended 31 December 2016 (FY2016)

Highlights :
1. Revenue surges 16.9% to RM654.9 million compared to RM560.2 million previous year.
2. Addition of six new lines ramped up total annual production capacity to 6.2 billion pieces of gloves;
3. Phase 4 of expansion plan has commenced, on track for completion by end FY2017
4. Net profit was RM120.4 million compared to RM126.5 million. Down 4.9%.
5. EPS for FY2016 was 16.91 sen. Assume 1RM = S$0.33, at today's closing price of S$0.905, P/E = 16.72.
6. NAV per share as at 31/12/2016 = 74.82 sen or 24.69 cent.
7. Board recommends a final dividend per share of 5.19 sen (RM), bringing total dividends to 6.49 sen (RM) (FY2015: 6.45 sen (RM)) to reward loyal shareholders.

More details in :
1. http://infopub.sgx.com/FileOpen/Riversto...eID=440182
2. http://infopub.sgx.com/FileOpen/Riversto...eID=440183

Riverstone’s  1QFY2017  revenue  rises  38.9%  to  RM205.7  million;   net  profit  grows  23.7%  to  RM33.6 million

The US market, the mobile,  tablet,  and  LCD  manufacturing  industries for the cleanroom gloves, the 10b glove capacity target by 2019... Looking bright, looking bright future. [SMILING FACE WITH SMILING EYES]

Sent from my SM-G850F using Tapatalk

Any friend here still holding on to this cash cow ?
Looks like earning will be good through FY2021 as capacity is almost fully booked till June 2021 .
Some regular customers are taking up the capacities of the new production lines which were just commissioned .

Riverstone@1.38

On 4 June 2021, the Group discovered positive cases of COVID-19 infection amongst its factory workers from its manufacturing facilities based in Taiping, Perak.

Based on preliminary calculations, taking into account the temporary closures of its manufacturing facilities in Taiping, Perak and limits on workforce capacity to 60% as mandated by the Malaysian government, the Group has estimated a capacity loss of approximately 200 million pieces of gloves, or approximately a 2% impact on the Group’s total annual production capacity of 10.5 billion pieces.

Stay home and stay safe, everyone.

(13-12-2020, 12:08 AM)cfa Wrote: Any friend here still holding on to this cash cow ?
Looks like earning will be good through FY2021 as capacity is almost fully booked till June 2021 .
Some regular customers are taking up the capacities of the new production lines which were just commissioned .

After the big crash down,  the price seems to have bottomed around $1+ and recently I have started accumulating. Missed out on the initial growth years but with good div yield lotsa potential left in this one I reckon. 

Bullish on their cleanroom glove business as I think lotsa new wafer fabs and stuff gonna go into production in near future given chip shortages. 

And covid is still gonna drag on and maintain if not increase healthcare glove usage.

what do you guys think? good value?

Riverstone@121
1H2021 Result w 10sen div
https://links.sgx.com/FileOpen/Riverston...eID=677582

https://drive.google.com/open?id=1OO6Mlt...ndRfoj3YOe

Stay home and stay safe, everyone.