SINGAPORE (May 5): Lim & Tan Securities is upgrading its call on Riverstone Holdings from “hold” to “buy” while upping its 2017 and 2018 net profit forecasts for RM140 million ($45.3 million) and RM 150 million respectively, from RM120 million and RM130 million previously.

This represents a forward and prospective price-earnings ratio of 13-14x, which Lim & Tan deems undemanding relative to the company’s growth rate of 20%.

In a report issued on Friday, the brokerage’s Singapore research team says Riverstone’s 1Q17 net profit of RM33.6 million accounted for 27.5% of their old 2017 forecast of RM120 million, when it usually accounts for only 20%, and therefore comes as a surprise.

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