On 7 May 2025, Riverstone Holdings Limited (“RS”) announced their first quarter result for FY2025. RS has seen a notable decrease in their earnings this quarter, where management have disclosed that this was attributable to an increase in cost of sales. There is also expectation that this may be further impacted over the next few quarters as management is monitoring the situation, particularly on the potential impact of US tariffs, and actively exploring strategies to mitigate risks. Currently, RS is still trading at a high price to book ratio, though they have a healthy cash balance with no external borrowings. These can provide buffers against any uncertainties that may arise. Investors will need to monitor and assess their risk appetite.
Disclaimer: Not financial advice. All data and information provided on this site is for informational purposes only.
Website: Financial Statements And Related Announcement::First Quarter Results
Website: General Announcement::Corporate Presentation 1Q2025
Financial Highlights
Revenue
| Metrics | Current | Previous |
|---|---|---|
| Revenue | +1.1% | +17.3% |
| Rating | Favorable | Favorable |
Revenue for the first quarter of FY2025 has increased by 1.1% to MYR252 million from MYR249 million for the same period in the previous financial year. The increase in revenue is relatively muted, and management has disclosed that this was due to the business is currently navigating a challenging environment of price competition. The revenue metric remains Favorable, though investors should monitor over the next few quarters.
Earnings per share
| Metrics | Current | Previous |
|---|---|---|
| Earnings per share | -21.8% | +30.2% |
| Rating | Unfavorable | Favorable |
Earnings per share for the first quarter of FY2025 has decreased by 21.8% to MYR0.0381 per share as compared to MYR0.0487 per share for the same period in the previous financial year. The decrease is mainly contributed by the decrease in gross profit, where management has disclosed that currently the business is experiencing volatile raw material prices and increased production costs. The metric has shifted towards Unfavorable.
Operating Cash Flows
| Metrics | Current | Previous |
|---|---|---|
| Operating Cash Flows | +19.8% | +23.3% |
| Rating | Favorable | Favorable |
Cash flow generated from operations for the first quarter of FY2025 amounted to MYR56 million, an increase by 19.8% compared to MYR46 million for the same period in the previous financial year. The increase was mainly due to improvements in collection of receivables, offset by an increase in settlement of payables. The metrics remain Favorable.
Gearing ratio
| Metrics | Current | Previous |
|---|---|---|
| Gearing ratio | 9.7% | 11.4% |
| Rating | Favorable | Favorable |
Gearing ratio as of 31 March 2025 stands at 9.7%. This metric is computed using total assets of MYR1,810 million and total liabilities of MYR175 million. The metrics remains Favorable as RS is less reliant on external sources to fund operations.
Interest coverage
| Metrics | Current | Previous |
|---|---|---|
| Interest coverage | 10,471.9x | 7,632.6x |
| Rating | Favorable | Favorable |
The interest coverage as of 31 March 2025 stands at 10,471.9 times, using profit before interest and tax of MYR73 million and finance costs of MYR0.007 million. The significantly high interest coverage is due to the Group has no external borrowings, with finance costs arising due to their lease liabilities. The metric remains Favorable.
Price-to-book ratio
| Metrics | Current | Previous |
|---|---|---|
| Price to Book Ratio | 1.97 | 3.08 |
| Rating | Unfavorable | Unfavorable |
The Net Asset Value (“NAV”) per share of the Group as of 31 March 2025 stands at MYR1.10 per share. This amounts to SGD0.333 per share when translated at the closing exchange rate of SGD1:MYR3.30 as of 20 June 2025. With a closing share price of SGD0.655 as of 20 June 2025, the Price-to-book (“P/B”) ratio for RS is 1.97. This is Unfavorable as you will be paying a significant premium to its book value.
Website: Yahoo Finance SGD to MYR
Worth noting that with cash and cash equivalents of MYR759 million and no borrowings, at total ordinary shares of 1,484 million this represents net cash of SGD0.15 per share.
As of 20 June 2025, the Market Capitalization is approximately SGD970 million.
Website: Yahoo Finance: Riverstone Holdings Limited (AP4.SI)
Dividend
| Year | Yield | Total |
|---|---|---|
| 2025 | 6.93% | MYR 0.150 |
| 2024 | 11.31% | MYR 0.245 |
| 2023 | 12.93% | MYR 0.280 |
| 2022 | 24.93% | MYR 0.540 |
| 2021 | 13.85% | MYR 0.300 |
| 2020 | 4.55% | MYR 0.099 |
With the dividend payout in June 2025 amounting to MYR0.030 per share, this is lower than the amount paid compared to the previous calendar year. RS is likely to lower the payouts for October 2025 and December 2025 to MYR0.030 per share. The expected dividend payout for the calendar year 2025 will be approximately MYR0.210 per share.
With a closing share price of SGD0.655 and closing exchange rate of SGD1:MYR3.30 as of 20 June 2025, this translates to a dividend yield of 9.71%. For my benchmark, a general reasonable yield would be around 5.25%. The dividend yield is thus Favorable.
Website: Reasonable Dividend Yield 2025Q2 – 5.25%
Do note that their dividend has been on a downtrend though it is still at a relative high yield. A more conservative estimate may be to assume that RS pays a dividend of MYR0.030 per quarter. When annualized, this amounts to MYR0.120 which translates to SGD0.036 and a dividend yield of 5.55%.
If using dividend yield of 6.25% as a benchmark, based on the lowered dividend of MYR0.120 per share there is potential for RS to see its share price drop by another 11.2% to SGD0.580. This may occur if the dividend continues its downtrend.
| Yield | Share Price | Downside |
|---|---|---|
| Current | 0.655 | – |
| 6.25% | 0.580 | -11.2% |
| 7.25% | 0.500 | -23.5% |
Summary
| Metrics | Financials | Rating |
|---|---|---|
| Revenue | +1.1% | Favorable |
| Earnings per share | -21.8% | Unfavorable |
| Operating Cash Flows | +19.8% | Favorable |
| Gearing ratio | 9.7% | Favorable |
| Interest coverage | 10,471.9x | Favorable |
| Price to Book Ratio | 1.97 | Unfavorable |
| Overall | Neutral |
Overall, it has shifted towards Neutral to invest in RS. It is possible that RS may see their metrics worsen over the next few quarters, as management have disclosed that they are closely monitoring the situation particularly on the potential impact of US tariffs and actively exploring strategies to mitigate risks. Investors will need to monitor if there are any changes to the dividend payout in the calendar year 2025.
Background
Riverstone Resources is established in year 1989 and still growing in their industry. With a history spanning close to 30 years, Riverstone has accumulated a huge network of stakeholders and expertise in their making. Being one of the leading manufacturers of cleanroom and medical industry, they manufacture top of the line healthcare gloves, nitrile gloves, finger cots, face masks, packaging bags etc.
Their products are widely qualified and used in the Hard Disk Drive (HDD), semiconductor and healthcare industries in Malaysia. On top of the achievements, Riverstone exports their products to key high technology countries around Asia, Europe and the American region.
Riverstone has been growing extensively, for the amazing recognition for their products around the world. To cope with growing demands, they have increased their capacity by setting up a new manufacturing plant in Thailand in year 2001, and another one in Wu Xi China in year 2004. Later in year 2010, they built a new plant in Taiping, equipped with only state of the art manufacturing facility to keep their promises for premium quality.
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Website: Riverstone Holdings Limited (SGX: AP4): 2024 Full Year Result
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