Australia's Reliance Worldwide could face manufacturing risks in China - Citi

Reliance Worldwide

12/04/2022 20:28

** Analysts at Citi flags a potential risk that Reliance
Worldwide Corp's  RWC.AX  manufacturing and souring may be
affected by China's 'zero-Covid' policy following a spike in
infections there    
    ** Says it is aware of reports that Ningbo, the area that
produces ~70% of EZ-FLO's products has introduced lockdown type
restrictions and may be about to go into another period of
uncertainty  urn:newsml:reuters.com:*:nASX1kVGjT
    ** RWC acquired EZ-FLO late last year for $325 mln
    ** Potential implications include higher freight costs,
security of supply and inefficiencies in manufacturing - Citi 
    ** Says for longer term we expect management could diversify
supply chains and forfeit acquisition synergies.
    ** Citi maintains PT at A$4.00 with a 'sell' rating on the
stock 
    ** Eight of 11 analysts rate the stock 'buy' or higher while
three rate it 'hold', their median PT is A$5.80 - Refinitiv
Eikon 

 (Reporting by Tejaswi Marthi in Bengaluru)
 ((tejaswi.marthi@thomsonreuters.com))