For years, companies in the healthcare services and pharmaceuticals sector are the kind of stocks that investors will hold on to for long-term. But due to the pandemic, companies providing medical consumables like as the glove makers, are now surging into prominence as well.
Two of these companies with listings on the Singapore Exchange (SGX) have been especially eye-catching. Top Glove Corporation has been named category winner in returns to shareholders within this industry sector, while Riverstone Holdings came out tops for the weighted Return on Equity (ROE) category, and is also named the overall sector winner. Riverstone Holdings is also the second overall winner across all industry sectors for this year’s Billion Dollar Club.
SEE: DBS downgrades Riverstone Holdings to ‘hold’, other analysts still positive
Riverstone Holdings was set up as Riverstone Resources back in 1989, and under executive chairman Wong Teek Son, the company has grown to be one of the leading manufacturers of cleanroom and medical industry. It has plants in Malaysia, Thailand and China. It makes a variety of products ranging from top of the line healthcare gloves, nitrile gloves, finger cots, face masks to packaging bags.
Besides the healthcare industry, the gloves it makes are used by operators in clean rooms of the hard disk and semiconductor industries. More than 85% of its output is exported to customers in other parts of Asia, Europe and the American region. Its weighted ROE in the evaluation period was 18.8 times, which places it among one of the higher-scoring companies.
Top Glove, in many ways, is similar to Riverstone. It was founded in Malaysia too but has since grown from being a local enterprise
to a multinational set-up. The company was founded in 1991 by Tan Sri Dr Lim Wee Chai and has since expanded and set up manu-
facturing facilities in Thailand, Vietnam and China, with some 21,000 people on its payroll. It sells to more than 2,000 customers in 195 countries and claims to have a 26% market share globally for rubber gloves. It was first listed on Bursa in 2001 and had a subsequent listing on the SGX in 2016. Thanks to the surge in its share price in early 2020, Top Glove has been rated sector winner in terms of returns to shareholders. From a share price hovering at just below 30 cents for the better part of the evaluation period, Top Glove’s share price started surging early this year to $1.76 as at June 30, the cut-off date to measure this year’s Billion Dollar Club winners. Since then, Top Glove shares have continued climbing to an intra-day high of more than $3 on certain days.
Haw Par Corporation, which sells the Tiger Balm household brand of medical ointment, has been rated sector winner in terms of growth in profit after tax. In FY2016, it recorded earnings of $125 million, which dipped slightly to $122.5 million for FY2017 before jumping to $179.1 million and $182.2 million for FY2018 and FY2019 respectively, which translates into a CAGR of 13.4% over
the evaluation period.
The company is one of the more famous business brands in Singapore and has been listed on the SGX since 1969. The brand is best known for its Tiger Balm topical analgesic brand, with products sold in more than 100 countries. Besides the consumer healthcare business, Haw Par also has interests in the leisure business and holds significant investments in securities and properties, such as its holdings related to the business empire led by Wee Cho Yaw’s family.
