taipingplant9.14a@ Riverstone's plant in Taiping. NextInsight file photo.


Maybank TV interviews John Cheong, investment analyst at Maybank-KE, who shares his views on the rubber glove industry. 

Overview:

1) UG Healthcare (Buy; TP: $0.49) has just completed its largest organic expansion ever and could see 38% growth in EPS this year. Coupled with a strong distribution network, the counter appears to be really cheap, trading at close to 50% discount to its peers 

2) Riverstone (Buy; TP: $2.12) is expected to release strong earnings growth of more than 50% in the next few quarters on the strong USD as well as contributions from its 23% expansion in manufacturing capacity. 

3) Comparing the two rubber glove plays, Riverstone’s strength lies in its strong technical expertise while UG Healthcare’s forte is in its marketing capability. 

4) In terms of valuations however, UG Healthcare is relatively more attractive as it has lagged Riverstone’s ytd price appreciation, while trading at a larger discount it its peers. 

5) Sovereign wealth fund support as well as lack of industry understanding could be the main reasons why the glove sector in Singapore is lagging behind Malaysia’s glove plays in terms of valuation. 

6) Continued improvement in financial performance as well as potential merger and acquisitions would be positive catalysts. 





Share Prices

Counter NameLastChange
AEM Holdings4.1400.020
Avi-Tech Electronics0.290-
Broadway Ind0.136-0.002
China Sunsine0.4550.015
DISA0.003-
Food Empire0.505-0.010
Fortress Minerals0.340-
Geo Energy Res0.385-0.005
Golden Energy0.8400.005
GSS Energy0.045-
InnoTek0.410-0.020
ISDN Holdings0.440-0.005
ISOTeam0.100-
IX Biopharma0.136-
Jiutian Chemical0.0790.001
KSH Holdings0.330-0.005
Leader Env0.0620.007
Medtecs Intl0.116-0.001
Meta Health0.031-
Moya Asia0.089-
Nordic Group0.480-
Oxley Holdings0.159-
REX International0.255-0.005
Riverstone0.595-
Sinostar PEC0.180-
Southern Alliance Mining0.600-
Straco Corp.0.400-
Sunpower Group0.260-
The Trendlines0.085-
Totm Technologies0.124-
UG Healthcare0.1770.001
Uni-Asia Group0.8650.005
Wilmar Intl3.730-0.030
Yangzijiang Shipbldg1.1800.080

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