Added 2 New Companies Into My Portfolio To Diversify My Dividend Income Streams

This month, I added 2 companies into my SG Dividend Portfolio, namely Kimly and Riverstone.  In this post, I will document my reasons for choosing these 2 specific stocks and some of the pros and cons of owning their shares.  Currently it is just a small addition, and they only take up less than 1% allocation in my overall portfolio.  However do note that this is not financial advice.  I am not recommending anyone to buy or sell these shares.  All that is written below is for my personal perusal and a record of my investing journey.  If any of the numbers provided below are wrongly stated, I would like to apologize in advance and kindly highlight to me to do the necessary amendment.

Why I Decided to Buy Kimly Shares

Kimly is a Singapore-based Food & Beverage (F&B) operator, and one of the largest traditional coffee shop operators in Singapore.  Its business is divided into Coffee Shop (Outlet Management), Food Retail (e.g. food courts, mixed rice and dim sum outlets), and Outlet Investments (property rentals).  In FY2024 it opened new outlets (including 11 new food stalls and 2 restaurants).  Kimly’s outlets enjoy very high occupancy (>99% in coffee shops), reflecting its strong market presence and diverse F&B portfolio.

Over the past three years, revenue has been relatively stable, and profit has fluctuated moderately (see table below).  FY2022 revenue was SGD 317.7M, slipping to SGD 313.9M in FY2023 and rising to SGD 319.4M in FY2024.  Gross profit margins held steady (~28–29%).  Net profit after tax (and non-controlling interests) was SGD 36.7M (FY2022), SGD 39.3M (FY2023) and SGD 36.1M (FY2024).  Earnings per share (basic) moved from 2.74 cents in FY2022 to 2.94 cents in FY2023 and 2.67 cents in FY2024.  Kimly’s dividend policy is to pay ≥50% of net profit.  Actual dividends per share (DPS) were about 2.00 cents in FY2022, 1.68 cents in FY2023 and ~2.12 cents in FY2024 (FY2024’s total comprised a 1.00 cent interim and a 1.12 cents final dividend).  At the current price (SGD 0.33 as of 9th May 2025) this implies a dividend yield of roughly 6–7%.

Kimly remains largely net-cash.  As of 30 Sep 2024 it held ~SGD 98.5M cash on hand versus only ~SGD 17.7M in interest-bearing debt.  Net assets were SGD 183.3M (NAV SGD 0.147 per share).  Cash flow from operations has been strong (around SGD 87.7M in FY2024), easily covering its modest capex and dividends (FY2024 dividends paid totaled SGD 26.3M).

Pros of Investing in Kimly 

Kimly’s business is relatively stable and recession-resilient (Singaporeans frequent affordable local food outlets).  The company has a strong track record and proven track record and excellent relationships with shopkeepers, giving it ~99% occupancy across its outlets.  It expanded outlets during FY2024 (boosting future revenues) while maintaining solid cash flows.  The balance sheet is healthy (high cash, low debt), and management targets generous dividends (it paid ~75% of profit in FY2024).  The current yield (~6–7%) is attractive for income investors seeking stability.

Cons of Investing in Kimly 

Growth is constrained by a saturated Singapore F&B market.  Profit was slightly down in FY2024 despite higher revenue, as costs (labor, utilities, rent) have been rising (partly offset by government rebates).  Intense competition in the local F&B scene and rising input costs could pressure future margins.  Dividend payouts, while generous, can fluctuate (e.g. FY2023 DPS was lower than FY2024) and dependent on profits.  In addition, Kimly’s exposure is almost entirely domestic, lacking geographic diversification.  As an investor, it is also important to note that the trading volume for its shares is low, which can be a double-edged sword for Kimly.

Personal thoughts:  I think it is a good time to own Kimly shares now, especially when many analysts are suggesting the probability of recession in the near future.  I think that in times of recessions, businesses from restaurants will be negatively impacted as consumers curb spending but in turn it will benefit coffeeshops and hawker centers businesses.  I may be right, I may be wrong.  Nonetheless, I believe what matters is the allocation I set aside for this company within my portfolio.  If this purchase turns out great, I will benefit from the capital gains and dividend income.  If this investment turns sour, it is not detrimental to my overall portfolio, and hopefully dividend income does not stop.  In addition, the share price of Kimly has largely been rangebound between SGD 0.30 to SGD 0.35 since 2023 till now, thus its probably going to function like a bond within the portfolio in the near term. 

Why I Decided to Buy Riverstone Shares

Riverstone is a Malaysia-based manufacturer of cleanroom and healthcare gloves, listed in Singapore.  Its products (primarily nitrile gloves) serve global markets, including semiconductor (cleanroom) and medical/consumer applications (recall its boom during the pandemic).  In recent years the glove segment has made up ~95% of its revenue.

Riverstone’s FY2022–2024 results reflect the cyclicality of the glove industry.  Revenue fell sharply from MYR 1,259.5M in FY2022 to MYR 914.8M in FY2023 (–27%) as worldwide glove supply exceeded demand.  In FY2024 revenue rebounded to MYR 1,072.8M (+17% y-o-y) due to higher sales volume and improved prices.  Gross profit (MYR 450.3M → 295.5M → 390.1M) and gross margins (35.8% → 32.3% → 36.4%) followed the same pattern.  Net profit after tax was MYR 314.4M (FY2022), MYR 220.4M (FY2023), and MYR 286.9M (FY2024).  Basic EPS was 21.21 sen, 14.87 sen and 19.36 sen respectively.  Riverstone paid a total dividend of 34.0 sen in FY2022, 22.5 sen in FY2023, and 24.0 sen in FY2024 (including interim and special dividends).

Riverstone’s balance sheet is very strong.  At the end of 2024, total assets were ~MYR 1.78B with shareholders’ equity ~MYR1.58B.  The company holds large cash reserves (approximately MYR 715M at 2024 year-end) and virtually no bank debt (net debt≈0, debt-to-equity ~0%).  In FY2024, Riverstone generated MYR 307M from operations and spent about MYR 80M on capex, implying ample free cash flow to fund dividends and investment.  The declared FY2024 dividend (24.0 sen) on a share price around SGD 0.80 (≈MYR 2.53) yields roughly 9–10%.  In fact, as of May 2025 the shares traded near SGD 0.73 (recently hitting a 52-week low of SGD 0.71 due to disappointing Q1 2025 results), implying a dividend yield well above 6%.

Pros of Investing in Riverstone

Riverstone has a niche in high-end cleanroom and healthcare gloves, which tends to command higher margins than commodity gloves.  It has recovered strongly from FY2023’s trough and FY2024 revenue and profit were well above pre-pandemic (2019) levels, and management notes continued investments in new production lines (adding 6 cleanroom lines and 3 healthcare lines in 2024).  The company historically pays out a very high portion of profit in dividends (FY2024 payout >120%), supported by its massive cash reserves.  Do note that the high payout ratio is not customary in Riverstone (which may render the dividends unsustainable), in fact, the high payout ratio only happened in the last couple of years after the pandemic, as a means to distribute the company's high cash reserves it has accumulated during the pandemic to reward shareholders.  It also has low operating risk (no interest burden, no heavy debt) and benefits from scale and long-term customer relationships.  The Board explicitly targets rewarding shareholders (recently they have approved a one-time “special” dividend on top of the regular payout).

Cons of Investing in Riverstone

The glove industry is cyclical and intensely competitive.  FY2023’s plunge (–27% sales) reflects that Riverstone is exposed to swings in global demand and pricing for gloves.  A glut of supply (and periodic product-commodity status) can pressure future revenue and margins.  Input costs (latex/rubber, energy) and forex moves (RM vs USD) can also squeeze profits.  Although Riverstone focuses on higher-end gloves, it still faces competition from other large manufacturers and from lower-cost regions.  Moreover, much of its growth so far was capex‐financed, and any slowdown could leave underutilized capacity.  Dividend levels, while attractive, depend on maintaining strong cash flows; any sustained earnings drop could force cuts.  In addition, with the looming trade war and tariffs, its margin could be negatively impacted moving forward as it can be estimated that the US market accounts for approximately 20% of its sales.  

Personal thoughts: Riverstone has been in my watchlist for quite a while due to the good dividends but the cyclical nature of the business and the relatively high valuation kept me away.  Back in February, when Riverstone released its annual results, it has a PE ratio of approximately 17 times.  However after the release of the most recent Q1 results, based on the trailing 12 month EPS, the plunge in share price in the past 2 days before my purchase caused the PE ratio to drop to around 14 times.  As such, I decided to nibble some shares, but at the same time keeping its allocation to less than 1% within my portfolio for now.

So those were my latest inclusions this month.  If opportunities present themselves, I will continue to add more of their shares, but they will not be my core positions.  I will limit their allocations within my portfolio at below 3% even if I continue to add more shares.  I believe they can contribute meaningfully to my dividend income in the months and years ahead.  Once again, do note that this is not a buy call for anyone.  What is suitable for myself may not suit others, and do understand that low share price can go lower.  Barista FIRE, here I come...!