Thursday, August 8, 2013

Riverstone performed well in 2Q’13 (Limtan)

RIVERSTONE
S$0.63-RSTON SP
 Riverstone performed well in 2Q’13 with sales rising 16% to RM90.43mln and profit rising 31% to RM14.4mln, bringing 1H’13 sales up 13% to RM171mln and profit up 27% to RM26mln.

 This is slightly ahead of expectations and reflects better than expected productivity improvement as well as favourable raw material prices.

 Good working capital management saw operating cash flow rise slightly for 1H13 to RM21mln, more than enough to offset capex of RM8mln, giving a free cash flow of RM13mln.

 The company continues to be debt free with net cash of RM91mln.


 Interim dividend was raised from last year’s RM2.2 cents to RM2.3 cents.

 Looking ahead, the company will be increasing their production capacity further in 2014 by another 20% to cater to the rising demand from both the electronics and healthcare sectors.

 Notwithstanding the still bright outlook, the stock has done well, having risen close to 30% since our initial buy recommendation early this year and is coming close to re-testing its all time closing high of 68 cents achieved in mid-2010.

 At 12x PE and 4% yield currently, we think valuations are looking fair in the near term and believe the 68 cents peak in mid-2010 will see the stock resisted and likely to consolidate its gains.

 Downgrade to HOLD as we believe the stock will likely be range bound in the near-medium term.


Source/Extract/Excerpts/来源/转贴/摘录: Limtan-Research,
Publish date: 06/08/13

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