Highlights

• A stronger US dollar against the ringgit and improving pricing power from recent ASP hikes by Chinese glovemakers should provide an earnings tailwind.
   
• The cleanroom glove segment, which contributes around 70% of earnings should remain robust, helped by ongoing orders from AI-related data centre and memory storage customers.
   
• Maintain BUY with an unchanged target price of S$1.21. Riverstone currently trades at around 15% discount to peers and offers an attractive 7% 2026 yield.
   

Analysis

• Stronger US dollar provides near-term earnings tailwind. The recent strengthening of the US dollar against the Malaysian ringgit should be positive for Riverstone Holdings (Riverstone), reversing some of the forex headwinds seen earlier in the year. USD/MYR has moved to around 4.08 in early-Oct 26, compared with the stronger ringgit environment that weighed on Riverstone’s 1H26 earnings. With a significant portion of sales denominated in US dollars while a large part of its core base is in ringgit, a stronger US dollar should support revenue translations and margins in the near term.   
   
• Chinese glovemakers’ ASP hikes improve pricing environment. Recent price increases by Chinese glove manufacturers are positive for the broader glove pricing environment. Chinese generic nitrile glove ASPs have risen, narrowing their discount to Malaysian producers to around US$0.50/1,000 pieces from US$1.50-2.00 previously. This gives Malaysian glovemakers greater room to raise ASPs without materially widening the price differential and should support Riverstone’s healthcare glove pricing and margins. However, we expect Riverstone to remain selective in competing for generic volumes, given its focus on higher-value customised products. 
   
• Cleanroom remains the key growth engine with demand boost from AI. Cleanroom glove demand has been rising since 2Q26, helped by ongoing orders from AI-related data centre and memory storage customers. We see the cleanroom segment as Riverstone’s main earnings driver going forward. Riverstone is also renewing older production lines and moving away from low margin generic output towards higher value cleanroom and customised healthcare products. This should improve product mix and margins over time.