Riverstone Holdings

[Belg]

I have been looking at Riverstone recently. Financially sound with good track record.

But my concern is whether there is any real economic moat at all. As a lab user, I use a lot of nitrile gloves in my line of work. However, i notice that there is little to no brand awareness in that as long as it is nitrile gloves, we are happy to use them. As such, the company's focus during procurement is mainly the price. This makes nitrile gloves somewhat like a commodity whereby the one that can sell you the cheapest gloves win.

I'm not sure if this is the same case as those in the industries that require cleanroom facilities though. But the "contracted production line" concept sounds like a good way to mitigate revenue fluctuation

-Not vested-


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One of the moats of the company, is the company ability to manufacture highly-customized products with more and less similar cost structure. It needs a established process to do it, with its volume and unit price. The process involves sale, R&D, and production departments, which is indeed a real challenge to copy by competitors.

FYI, I am not aware any competitors of the company having the same level of process for product customization. Hartalega didn't has it at all.

Next valid question is, do the customers need the value-added service? Well, HDD sector needs it, and the company has been providing the service to their key customers in this sector

Do the healthcare sector need it? I reckon the service is highly demanded, with the engagement of healthcare customers in new production lines.

(not vested, but waiting)

I like the way they move prudently with little added debt to finance a land acquisition and production line. Very business-like and firm with good future income stream.