Riverstone Holdings - DBS Research 2015-10-01: Initiate coverage with BUY call

Riverstone Holdings - DBS Research 2015-10-01: Initiate coverage with BUY call RIVERSTONE HOLDINGS LIMITED AP4.SI 

Riverstone Holdings - Initiate coverage with BUY call 

  • We initiate coverage on Riverstone Holdings with BUY call and target price of S$2.15, offering potential upside of c. 34% to current price. 
  • Both short and long-term trends indicate favourable demand growth prospects. The global market for healthcare gloves is estimated to grow at 8-12% p.a. between now and 2020. As a relatively new entrant in the healthcare gloves industry, we project Riverstone’s healthcare glove output to grow 133% from FY14-17 as it intends to grow revenue from this segment quickly to drive its earnings. 
  • In the longer term, Riverstone could also potentially benefit from the substitution of nitrile for latex gloves, which made up c. 53% of the global supply in 2014, from c. 74% 5 years ago. 
  • Riverstone is a beneficiary of strong US$ vs Ringgit and low commodity prices while capacity expansion is expected to underpin growth. 


Yeo Kee Yan DBS Vickers | Ling Lee Keng DBS Vickers | http://www.dbsvickers.com/ 2015-10-01
DBS Vickers Analyst Report BUY Initiate BUY 2.15 Same 2.15


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