Excerpts from DBS Bank's report
|
Stock |
% of Sales |
% of Cost in US$ |
Amount of loan in US$ |
Sensitivity Analysis |
|
Riverstone Holdings |
80% |
35% |
n.a. (Net Cash) |
+6% |
Riverstone Holdings -- Generates a surplus in USD - every 10% depreciation of the MYR vs USD could boost earnings (in MYR terms) by c.15%. 
Executive Chairman Wong Teek Son.
NextInsight file photoBulk of revenues are denominated in USD but raw material costs only represent 30% of revenues, on average.
However, we believe that the actual impact might be smaller and closer to 6% as the current competitive landscape among glove manufacturers might entail Riverstone to share more of its forex gains with customers through lower ASPs (in USD terms) in the event of a strong USD rally.
Yangzijiang is a beneficiary of stronger USD as bulk of receipts are in USD while reporting currency is in Rmb.
Bulk of the net exposure, c.40% of revenue, was unhedged as of end-2017. |
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Full report here.
