Riverstone recently caught my attention. It has tumbled approximately 32% from an intraday high of $4.90 on 7 Aug 2020 to close $3.33 on 11 Sep 2020. One client even thought that Riverstone has already undergone a bonus issue!
The recent weakness is likely attributed to its co-founder selling 15.5m shares at $3.95 (Bloomberg cites a 90-day lockup on seller); the possibility of a vaccine resulting in demand for gloves and consequently their average selling price (“ASP”) falling off the cliff and some Malaysia investors selling shares to raise cash, as their moratorium on loan repayment ends (click HERE for the article)
Granted that there is some merit to the above. However, is the 32% fall justified given that it is cheaper than its industry average based on FY21F PE? For this write-up, besides sourcing information from the usual sources, such as analyst reports; news articles etc, I have the fortune of catching up with Mr Wong Teek Son, Executive Chairman, Co-founder, and CEO of Riverstone