Fast-growing Riverstone Holdings faces 3 main growth risks
Possible pricing pressure is one.
Riverstone Holdings is seeing booming demand for its cleanroom and healthcare segments, but it remains vulnerable to 3 risks, according to OSK-DMG.
First, it could experience possible pricing pressure arising from its expansion in healthcare glove capacity.
"Riverstone’s European customers are increasingly asking the company to boost capacity to help them diversify their supplier base, which may potentially triple orders," noted OSK-DMG.
"If the company achieves its plan of expanding to an annual production capacity of 8.0bn pieces in FY19, we expect its earnings to grow at a CAGR of 22.4% starting from FY13, up more than 4.1x to MYR163.4m by then," it added.
A second risk for the firm are potential raw material price fluctuations, while its third vulnerability lies in its exposure to forex volatility.
If Riverstone manages to avoid these risks, then Riverstone could be well on its way to joining the the big league, according to OSK-DMG, due to its blistering rates of demand and expansion growth.