Until last week, Wong Teek Son had not bought shares of his company in at least 5 years, which is as far back as we can check on the SGX website.

It comes as no surprise that the executive chairman and CEO of Riverstone Holdings has been buying shares in recent days. 

RS Glove StrippingAt Riverstone's plant in Taiping, Malaysia. NextInsight file photoWhile sectors such as airlines, F&B and hotels are ravaged by the Covid-10 outbreak, manufacturing healthcare gloves is doing just great.

Singapore-listed and Malaysian-headquartered Riverstone (market cap: S$593 million at stock price of 80 cents) is benefitting from a surge in global demand for healthcare gloves.

And unlike most of the Malaysian economy, glove manufacturing has been deemed essential and has been exempted from the Movement Control Order, so the production lines of Riverstone and its peers continue to work. Furiously.


Riverstone Holdings

Share price: 
$0.80

Target: 
$1.30

Source: CGS-CIMB

As the Covid-19 viral outbreak sent stocks into a dive, Riverstone also fell -- from $1.07 on Feb 17 this year to as low as 69 cents on Mar 19. Then Mr Wong started to buy (see table).

The stock price has since rebounded to close at 80 cents yesterday (24 March).


WongTeekSon11.18bNow, Mr Wong's direct and deemed stakes total 378,246,560 shares, or 51.04% of Riverstone.

Buy date (2020)

No. of shares bought

Price/
share*

Value*

Fri, 17 Apr 100,000 $1.19 $119,200
Thurs, 16 Apr 50,000 $1.17 $58,400
Wed, 15 Apr 90,000 $1.16 $104,756
Mon, 13 Apr 40,000 $1.13 $45,100
Thurs, 9 Apr 110,000 $1.13 $124,265
Mon, 6 Apr 120,000 $1.00 $120,000
Fri, 3 Apr 130,000 99.78 c $129,717
Thurs, 2 Apr 100,000 99.99 c $99,993
Wed, 1 Apr 130,000 98.80 c $128,439
Tues, 31 Mar 130,000 99.98 c $129,975
Mon, 30 Mar 20,000 97.97 c $19,594
Fri, 27 Mar 150,000  91.03 c $136,550
Thurs, 26 Mar 160,000 82.85 c $132,566
Wed, 25 Mar 160,000 82.81 c $132,494
Tues, 24 Mar 130,000 77.70 c $101,006

Mon, 23 Mar 

210,000

74.11 c

$155,635

Fri, 20 Mar 

190,000

72.67 c

$138,065

Thurs, 19 Mar 

160,000

70.94 c

$113,505

Total

2,180,000

90.35 c
average

$1,969,666

excluding brokerage and stamp duties
Updated on 20 Apr 2020


CGS-CIMB's report on Riverstone in Feb 2020
said: "We forecast sales volume to grow 20% yoy in FY20F, with a stable product mix (volume split: 85% healthcare, 15% cleanroom)."

Better margins

OngKhangChuen“We believe the spike in global healthcare glove demand could lead to more favourable supply-demand dynamics in the healthcare glove sector, and translate into an increase in RSTON’s healthcare segment margins in FY20F.

ONG Khang Chuen, CFA
analyst, CGS-CIMB

And chances are the gross profit margins are expanding. This is key to stronger profitability along with production capacity increases.

CGS-CIMB expects Riverstone's earnings this year to grow 20.6% to RM157.3 million.

That puts its stock (80 cents) at a PE of 11.5X forecast 2020 earnings.


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