Heidi Mo of UOB Kay Hian, citing end demand from AI-related activities, has raised her target price for rubber glove maker Riverstone Holdings from 71 cents to 98 cents.
The cleanroom segment, according to Mo in her Oct 8 note, remains the Malaysia-based company's key earnings driver, contributing around 40% of revenue but nearly 70% of gross profit.
Riverstone, led by executive chairman Wong Teek Soon, expects 10% q-o-q volume growth in 3QFY25, supported by stronger demand from the semiconductor and AI-driven data-storage industries.
Customers such as Seagate and Western Digital are increasing output of hard disk drives and NAND devices, which in turn is lifting glove consumption, says Mo.
She observes that average selling prices and USD-Ringgit exchange rate to hold at around 4.25, while newly commissioned production lines have also come on-stream.
"While there is yet to be a full rebound, these lay the groundwork for a more meaningful recovery in 4QFY2025," says Mo.
