For the longer-term, he has a three-year expansion plan for Riverstone&rsquo s new production site in Taiping, Malaysia. Through this, he hopes to bring production capacity to 14.0 &ndash 15.0 pieces of gloves by FY2023.       

  Looking ahead, DBS Research Group analyst Lee Keng Ling expects earnings for 2H2020 to be &ldquo even stronger&rdquo , as the company benefits fully from the higher ASPs and margins.

  &ldquo We expect the ASP uptrend to continue till December, vs our earlier expectation of ASP plateauing from September,&rdquo Lee says in an August 6 note.

  Further increases in ASPs and demand for gloves may well be seen as the world experiences a resurgence of Covid-19 cases and a second waves as countries ease their lockdowns.

  &ldquo We have imputed a 50% y-o-y increase in ASP for healthcare gloves and 10% for the cleanroom segment in FY20F, and flat for both in FY21F. Gross margin is projected to further rise to 38% in FY20F and FY21F, from 35%, as ASP hikes more than offset the slight increase in costs,&rdquo asserts Lee.

  To this end, she has raised her FY20/21F earnings forecast by 10% and 13% respectively. The counter&rsquo s current price-to-earnings of 23.7 times sees it trading at a 40% discount to its peers, observes Ling.

  She is maintaining her &ldquo buy&rdquo call on Riverstone at a revised target price of $5.51. This is believed to give the counter a 31% upside from her previous $3.90 call. It also a 23.6% upside from the counter&rsquo s $4.21 close on August 5.