Analysts from CGS-CIMB Research and RHB Group Research have maintained their “buy” and “add” calls on Riverstone Holdings, but with lower target prices of $2.30 and $1.85 respectively.

For CGS-CIMB’s Ong Kang Chuen, the lower target price was due to the group’s elevated average selling prices (ASPs) not being sustainable in the long run despite seeing “strong earnings prospects” for Riverstone in FY2021.

Ong noted that despite some shipment delays, Riverstone’s 4QFY2020 net profit of RM$331 million ($108.7 million) was 85% higher q-o-q and a 932% surge y-o-y due to stronger-than-expected margin expansion, led by stronger ASPs. FY2020 net profit also came in at RM$647 million, 396% above FY2019’s figure. 

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