Credit Suisse issues non-rated report on RIVERSTONE HOLDINGS
Analysts: Sanjay Mookim & Anand Swaminathan
NextInsight inset pic of Wong Teek Son, CEO of Riverstone. The stock touched a record high $1.015 two days ago. Chart: Bloomberg.
• Riverstone (RSTON) manufactures clean room nitrile rubber
gloves (a specialised product) and other clean room
consumables; it also produces more commoditised 'healthcare'
variant of gloves.
While its revenues are split equally, clean room
While its revenues are split equally, clean room
gloves were c.70% of 2013 GP.
● Clean room gloves are used in electronics industries to reduce
Recent story: RIVERSTONE's 2Q: Another excellent quarterly result
contamination and electrostatic discharge, and require specialised
formulation and treatment, which RSTON has developed over
time.
Management believes quality standards and customer
Management believes quality standards and customer
acceptance are high entry barriers in this space.
Clean room gloves—a niche product: These are specialised gloves used in electronics 'clean rooms', and are needed to reduce contamination and electrostatic discharge in the manufacture of items such as HDD and integrated circuits.
Management suggests:
Management suggests:
● A clean room worker can use two-three pairs of such gloves in a day.
● RSTON has close to 50% global market share in the high-end Class 10 / Class 100 type of gloves.
● The gloves can be highly customised to a customer's needs; close to 40% of HDD manufacturing rejections are due to contamination.
● The manufacture of these gloves requires specific formulation and cleaning processes, which RSTON has developed over time.
● As a consequence, RSTON is the sole supplier of such gloves to many customers. The company reduces supply risk by having several manufacturing plants (Malaysia, Thailand, China).
|
|
Recent story: RIVERSTONE's 2Q: Another excellent quarterly result
Comments