Results at a glance
Same weakness as seen in 1Q16 – margin compression continued. Lower gross margin in 2Q16 (-5.7 percentage points (pp) vs 2Q15; – 4.7pp vs 1Q16) mainly due to change in product mix and unfavourable FX rate.
We think 2H16 will be better, because…
No stock rating or price target provided, as we do not have coverage on Riverstone Holdings Limited.
Riverstone is currently trading in line with the average Price/Earnings and with a higher return on equity (ROE) than the peer average.
Figure 2: Peers comparison
Figure 3: 3-Yr Historical PER
Figure 4: 1-Yr Historical MYR against USD FX rate