Our itinerary: Fly to Penang on SilkAir, then catch a 1.5-hour coach ride to Taiping. Map : GoogleNEXTINSIGHT will be travelling tomorrow to Taiping to check out Riverstone Holdings' new factory which has a production capacity of about 1 billion gloves.Also on the day trip will be 9 analysts from various houses, which reflects significant interest in this counter.
We will fly from Singapore to Penang and then catch a 1.5-hour coach ride to Taiping, the second largest town in the state of Perak after Ipoh.
Taiping is already the site of an existing factory of Riverstone, which has facilities also in Kuala Lumpur, Thailand and China.
The new plant in Taiping sits on part of a 30-acre site (equivalent to 30 soccer fields) which was bought for RM12.4 million in April 2013 and will be developed in four phases.
For perspective, the 30 acres far exceeds the 22 acres that all of Riverstone's existing plants occupy.
Executive chairman Wong Teek Son (foreground, in tie) and CFO Lim Sing Poew (background, in tie). NextInsight file photoClearly, the growth upside for Riverstone is still substantial. Riverstone's current production capacity is 3.2 billion gloves for use in the healthcare and cleanroom environments.
This is a long way up from the 720 million-capacity it had in 2006, the year of its IPO on the Singapore Exchange.
Despite the capex for expansion, Riverstone has reported positive free cash flows every year since 2006, and ended 2Q this year with net cash of RM89.2 million -- the result, no doubt, of the astute business strategy and capabilities of Riverstone's chairman Wong Teek Son and his management team, whom we will meet.
Riverstone's stock price (93.5 cents) also has climbed high, up 29% in the year to date and trades at about 10X analysts' consensus earnings estimate for 2015 and comes with a trailing dividend yield of 2.82%.
For more on the new factory, see: RIVERSTONE: 1Q record profit of RM16.0 m, new factory to provide boost
See NextInsight's video of the operations in the existing Riverstone factory in Taiping. The video was taken in Sept 2013.
Comments
May I have your contact number and address for our business visit at your Taiping plant.
Hearing your reply and thank you.
Rgds,
Zain