Sunningdale Technology - "Thoughts on the market".

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06 Jan 2014 13:56 - 06 Jan 2014 19:11 #18518 by josephyeo
Sunningdale Technology is one of 5 companies I mentioned in my post on "Thoughts on the market".

Reasons for my pick :

1. decent profits for the past 3 years

2012 - S$9,562,000

2011 - S$16,700,000 (before impairment .. see note)

2010 - S$18,900,000

(Note : 2011 company registered a loss of S$11,420,000
due mainly to impairment charges of S$23,700,000 and currency loss of S$4,400,000. Without the impairment charges n currency loss the company would have registered a profit of S$16,700,000.)

2. good profit trend in the last 3 quarters :

Jan - Mar '13 - S$2,313,000

April - June '13 - S#3,516,000

July to Sept '13 - S$3,796,000

Jan to Sept '13 - S$9,562,000.

(Note : the profits of the first 9 months of current financial year is almost equal to the whole of last year implying a huge improvement over last year)

3. expect good dividend payout.

the dividend payout ratio range from 28% to 94% in years when they are profitable. Last year payout was exceptionally high with a payout ratio of 94.5% which worked out to 1.2 cts per share giving a yield of 8.5% on current price of 14 cts.

a fairly good dividend can be expected this year as company has registered a profit of S$9.5 mil on it's 9 months result.

4. trading far below it's nta.

Nta 30.59 cts against current price of 14.1 cts as of date n time of posting.

5. massive restructuring

there is a massive restructuring going on in the company which i view positively and is likely to put the company into a more competitive position. Will deal with this later.

................ end for now ...............
Last edit: 06 Jan 2014 19:11 by josephyeo. Reason: grammar, spelling
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06 Jan 2014 20:42 #18530 by ngcheeki

3. expect good dividend payout.

the dividend payout ratio range from 28% to 94% in years when they are profitable. Last year payout was exceptionally high with a payout ratio of 94.5% which worked out to 1.2 cts per share giving a yield of 8.5% on current price of 14 cts.

a fairly good dividend can be expected this year as company has registered a profit of S$9.5 mil on it's 9 months result.


Based on my information from SGX , Sunningdale Tech had only pay out dividend of 0.6 cents in last 3 years. However, the company has been consistently paying out 0.6 cents for the past 3 years. Hence, to be conservative we should expect to receive 0.6 cents as well.


By the way, the net gearing for sunningdale tech has been improved from net debt to net cash of $0.01358 as at 3QFY2013. Hence, there is a high chance of dishing out higher dividend in this year.

Vested
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06 Jan 2014 21:43 #18531 by josephyeo
Hi ngcheeki ... there were 2 dividend payouts in year 2012 each at 0.6 cts. 1st paid out was in 1st quarter 2012 on 4 May 2012. 2nd payout was in their full year annoucement. Total dividend was 1.2 cts. Total amount paid out for the year was S$9,061,000. .. see the last page of their full year annoucement.


3. expect good dividend payout.

the dividend payout ratio range from 28% to 94% in years when they are profitable. Last year payout was exceptionally high with a payout ratio of 94.5% which worked out to 1.2 cts per share giving a yield of 8.5% on current price of 14 cts.

a fairly good dividend can be expected this year as company has registered a profit of S$9.5 mil on it's 9 months result.


Based on my information from SGX , Sunningdale Tech had only pay out dividend of 0.6 cents in last 3 years. However, the company has been consistently paying out 0.6 cents for the past 3 years. Hence, to be conservative we should expect to receive 0.6 cents as well.


By the way, the net gearing for sunningdale tech has been improved from net debt to net cash of $0.01358 as at 3QFY2013. Hence, there is a high chance of dishing out higher dividend in this year.

Vested

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06 Jan 2014 22:00 - 06 Jan 2014 23:07 #18534 by ngcheeki

Hi ngcheeki ... there were 2 dividend payouts in year 2012 each at 0.6 cts. 1st paid out was in 1st quarter 2012 on 4 May 2012. 2nd payout was in their full year annoucement. Total dividend was 1.2 cts. Total amount paid out for the year was S$9,061,000. .. see the last page of their full year annoucement.


Oops, it is my mistake :) ;). By the way, that also meant there was no dividend for FY2011 due to the lost for the year!!

Another catalyst for sunningdale is their sale of Joo Koon property and further reduce their debt level or increase their cash level but will only complete on valentine day FY2014. The following is a short summary.

Sale Consideration (S$'000) $9,100.00
Book Value $3,642.86
Gain $5,457.14
Gain per share $0.0072
Net proceed $8,600.00
Net proceed per share $0.011
Completion Date 14 Feb 2014

Use of proceed:
a. approximately S$7,000,000 towards the repayment of existing bank borrowings of the Group; and
b. approximately S$1,600,000 as working capital of the Group.
infopub.sgx.com/FileOpen/STL_Disposal_of...cement&FileID=258565

By the way, sunningdale tech needs to improve their ROE which has been less than 7% for the last 5 years.
Last edit: 06 Jan 2014 23:07 by ngcheeki. Reason: Add in additional detail
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07 Jan 2014 16:04 - 07 Jan 2014 16:05 #18552 by josephyeo
Other reasons for my pick on Sunningdale Technology :

1.it's an actively managed company as can be seen from the various initiatives undertaken by the company recently.


2.initiatives to improve efficiency/productivity

a) consolidating their European operation from Sweden to Latvia - from high costs to lower costs.

b) operations in Southern China from 3 plants to 2 plants - from 3 expense points to 2 expense points.

c) consolidate the Singapore operations from 2 to 1. And selling off the other, with the UFE operations relocating to the other plant in Singapore and the UFE operations to Johore. From 2 expense points to 1.


3. capital gain of S$5.43 mil through the sales of the operating plant in Singapore. This gain should be reflected in 2014 results. Improve cashflow n reduce debts.


4.others :

a) new plant in Batam on schdule and will start mass production in 4Q 2013.

b) new plant in Latvia on track for mass production in 4Q 2013. The capacity expansion is for a major Consumer/IT customer ... meaning that orders are quaranteed.

c) Tianjin plant set up for the launch of a major automotive program in 2014 is also on track.


Conclusion .. above initiatives are very major and strategic and have many implications on costs and efficiency/productivity. Cut costs where costs can be cut and increase capacity where there is a market for it. I think these are very good moves by the company.

................ end ...................
Last edit: 07 Jan 2014 16:05 by josephyeo. Reason: correct some spelling errors

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07 Jan 2014 23:08 #18560 by josephyeo
Good show today. Counter close at 14.4 cts with 3,362 lots traded. It seems that there is some interest in the counter.


Other reasons for my pick on Sunningdale Technology :

1.it's an actively managed company as can be seen from the various initiatives undertaken by the company recently.


2.initiatives to improve efficiency/productivity

a) consolidating their European operation from Sweden to Latvia - from high costs to lower costs.

b) operations in Southern China from 3 plants to 2 plants - from 3 expense points to 2 expense points.

c) consolidate the Singapore operations from 2 to 1. And selling off the other, with the UFE operations relocating to the other plant in Singapore and the UFE operations to Johore. From 2 expense points to 1.


3. capital gain of S$5.43 mil through the sales of the operating plant in Singapore. This gain should be reflected in 2014 results. Improve cashflow n reduce debts.


4.others :

a) new plant in Batam on schdule and will start mass production in 4Q 2013.

b) new plant in Latvia on track for mass production in 4Q 2013. The capacity expansion is for a major Consumer/IT customer ... meaning that orders are quaranteed.

c) Tianjin plant set up for the launch of a major automotive program in 2014 is also on track.


Conclusion .. above initiatives are very major and strategic and have many implications on costs and efficiency/productivity. Cut costs where costs can be cut and increase capacity where there is a market for it. I think these are very good moves by the company.

................ end ...................

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