Glove Makers 4QCY20 Earnings Preview - CGS-CIMB Research 2021-01-12: Riverstone & UG Healthcare ~ Another Strong Showing

UG HEALTHCARE CORPORATIONLTD (SGX:8K7) | SGinvestors.io UG HEALTHCARE CORPORATIONLTD (SGX:8K7) RIVERSTONE HOLDINGS LIMITED (SGX:AP4)

Glove Makers 4QCY20 Earnings Preview - Riverstone & UG Healthcare ~ Another Strong Showing

  • We forecast UG Healthcare and Riverstone to report another quarter of record earnings in 4QCY20, with net profits jumping 54x/8.5x y-o-y, respectively.
  • Fundamentals of glovemakers remain strong as ASP uptrend continues, which could support stronger earnings in quarters ahead.
  • We see value emerging post the removal of share price overhang (lifting of Bursa’s short-selling restriction). Maintain ADD on UG Healthcare and Riverstone.



Glove makers' fundamentals intact with ASP remaining firmly on an uptrend

  • We believe fundamentals of glovemakers remain strong in FY21F, as resurgence in COVID-19 worldwide underpin firm demand for gloves. The Malaysian Rubber Glove Manufacturers Association (MARGMA) estimates that the global glove shortage situation will persist in 2021F, due to increased usage in the medical field as well as in non-medical industries (retail, F&B, etc.).
  • Based on our channel checks, glove ASPs remain firmly on an uptrend, which could support strong earnings in quarters ahead.


UG Healthcare 2QFY21 net profit forecast: S$30m (+31% q-o-q, 54-fold jump y-o-y)



Riverstone 4Q20 net profit forecast: RM275m (+54% q-o-q, +757% y-o-y)


Overhang removed, value emerging






ONG Khang Chuen CFA CGS-CIMB Research | https://www.cgs-cimb.com 2021-01-12
SGX Stock Analyst Report ADD MAINTAIN ADD 1.700 SAME 1.700
ADD MAINTAIN ADD 2.500 SAME 2.500



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