Stock Analysis: Riverstone | Lianhe Zaobao
Riverstone recommends buying, with a target price of 0.98 yuan and a closing price of 0.81 yuan (+0.62%). It is expected that glove shipments in the third quarter will increase by approximately 10% quarter-on-quarter, driven by strong demand from the semiconductor and data storage industries. At the same time, the decline in the prices of nitrile latex and key raw materials will help improve gross margins. The U.S. government has proposed imposing a 100% tariff on imports of branded and patented drugs, but the impact on medical gloves is minimal
Riverstone
- Recommendation: Buy
- Target Price: CNY 0.98
- Closing Price: CNY 0.81 (+0.62%)
Riverstone's management expects that driven by strong demand in the semiconductor and data storage industries, glove shipments in the third quarter of this year will increase by approximately 10% quarter-on-quarter. At the same time, Seagate and Western Digital are increasing the production of products such as hard disk drives, which also boosts glove demand.
In addition, the price of nitrile latex has decreased by 3% to 6% quarter-on-quarter, and the prices of key raw materials, acrylonitrile and butadiene, have also declined by about 4% quarter-on-quarter, which helps to increase Riverstone's gross margin in the third quarter.
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On the other hand, to encourage global pharmaceutical companies to set up factories, the U.S. government has proposed imposing a 100% tariff on imports of branded and patented drugs starting this October. Although about 30% of Riverstone's gross profit comes from the U.S., the products targeted by the U.S. do not include medical gloves, so the impact on Riverstone should be minimal.
Given a "Buy" rating, target price CNY 0.98. (UOB Kay Hian)
