Excerpts from UOB KH report

Analysts: John Cheong & Singapore Research Team 

Top picks: Riverstone, Food Empire, Frencken

Riverstone. We expect Riverstone to post much stronger results for 2H20 as ASPs for healthcare gloves continue the uptrend (+10% mom in July and Aug 20) as global glove demand continues to outpace supply.

strip9.14Additionally, with an ASP hike already in place for 
Jun-Jul 20, the robust demand for clean room gloves has led to a second ASP hike that management expects in Aug-Sep 20.

At the current price, we believe there is room for 
upside as Riverstone is trading at only 15.8x 2021F PE, below the sector’s 19x 2021F PE.

• Food Empire. Trading at 8.7x 2021F PE vs >20x for its regional peers, valuation is due for a re-rating in our view.

maccoffee variants

Although some of its core markets in Eastern Europe are still under a 
partial lockdown, the restrictions are much less stringent compared to Mar-Apr 20 and have gradually eased since May-Jun 20.

This is evident through the significant improvement in the 
retail sales for countries such as Russia (retail food sales: Jul 20: -2.2% yoy, Apr 20: -9.2% yoy), Ukraine (retail trade turnover: Jul 20: +7.8% yoy, Apr 20: -11.6% yoy) and other CIS markets.

Furthermore, we believe the group’s sales should be more resilient against an 
economic slowdown given that its products are consumer staples with relatively inelastic demand.


Frencken europe youtube

• Frencken Group. Its 2Q20 earnings were in line with our expectations.

Despite supply chain 
disruptions in 1H20, the strong showing from group’s semiconductor segment revenue in 1H20 (+73.6% yoy) reflected strength in demand for both front-end and back-end equipment and management expects a better 2H20 for the segment, relative to 1H20.

The 19% 
retracement in share price since the beginning of August presents a good buying opportunity, in our view.

At the current price, the stock trades at 8.7x 2021F PE which 
compares favourably to the current peers’ average of 12.9x.

Full report here. 


Share Prices

Counter NameLastChange
AEM Holdings3.450-0.070
AusGroup0.021-
Avi-Tech Electronics0.4250.005
Best World Int.1.360-
CEI0.890-0.005
China Sunsine0.340-0.005
CNMC GoldMine0.2650.005
CSE Global0.470-
Food Empire0.585-0.005
Golden Energy0.164-0.001
GSS Energy0.052-0.001
ISDN Holdings0.4000.015
ISOTeam0.1500.001
IX Biopharma0.240-
JB Foods0.550-0.020
KSH Holdings0.330-
Medtecs Intl1.220-0.010
Moya Asia0.064-
Nordic Group0.200-
Oxley Holdings0.215-0.005
Procurri0.325-
REX International0.1460.003
Riverstone3.5300.040
Roxy-Pacific0.320-0.005
Sing Holdings0.3800.005
SingMedical0.250-
Straco Corp.0.490-
Sunningdale Tech1.4500.010
Sunpower Group0.530-
The Trendlines0.0900.001
Tiong Seng0.140-
Uni-Asia Group0.4200.005
Yangzijiang Shipbldg0.9800.010

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