Sunningdale Technology - "Thoughts on the market".

Basically, the company does not know what is the reason for the surge in volume and share price. However, the company does provide some business update whereby the company set up a manufacturing facility in Brazil.

infopub.sgx.com/FileOpen/Sunningdale.Ann...cement&FileID=270923

At 17.7 cts the company (Sunningdale Technology) is capitalised at S$135.3 million. Profit for 9 months of financial year (2013) is S$9.6 mil. The forecast full year would probably be around S$13 mil all things being equal. The forward pe would then be about 10.4 times.

But the real "big things" about the company are the recent initiatives it took to revamp the company ... closure of some plants, merging of others and concurrently ramping up capacity in some other places. (See my earlier postings for details)

The sale of it's Joo Koon plant will give a capital gain of S$5.43 mil likely to be reflected in 2014 account. If the other ïnitiatives" show up positively the company is certainly onto something "big".

Though i am heavily invested in this counter, I have no intention to sell unless the share price has gone ridiculously high. I am looking forward to their current year (2014) results before taking a decision, keeping in mind the capital gain of S$5.43 mil.

Things i look for when their first quarter result is announced ... has the margin gone up? has operating cost come down (exclude their new investment in Brasil)? are they able to hold on to the same level of revenue? etc etc. If my guess is correct their margin should improve visibly.

Above are just my points of views and "guesses" and are not necessarily correct or accurate. It's just for sharing.

All the best to all !!!

Thank you for the compliments.

Azzaramich wrote:
Good analysis. And good call.

Thank you ontheball. Yup i have a very big position here. My buying style is "deep n narrow".. meaning, I concentrate on only a handful of counters. Those I am really sure I may post. But that doesn't mean I am right. I make too many mistakes in the past but mistakes in the stock market are inevitable because there are so many variables at work at the all time. Anyway I am glad you bought some.
Cheers! and all the best to you!

ontheball wrote: Wow, Mr. Sunningdale is going gang busters today. The price is charging up like a mad man! Joe Yeo must be laughing all the way to the bank. You deserve it man, I read your analysis and bought a few shares of this beauty too. Thanks buddy, you rock.

Lim & Tan report on Sunningdale Tech this morning.

SUNNINGDALE TECH
S$0.177- SUNN SP
 Sunningdale Tech (ST) an electronic component
manufacturer was queried by SGX due to
yesterday’s higher than normal volume of 130mln
shares traded against its usual 2-3mln.
 In response, ST’s CEO Khoo Boo Hor said that
the board is not aware of any information that
may explain the heavy trading and while the company
is currently looking at setting up a green-field
operation in Brazil, it is at a preliminary stage and
initial investment is likely to be below US$1mln,
hence would not have been the reason for the
sharp increase in share price as well as trading
volume.
 Fact is, since registering a $20mln loss in 4Q’11,
ST’s bottom-line has been gradually improving from
$1-2mln range to 3Q’13’s $3.8mln while 9 month
profit rose 38% to $9.6mln on the back of new
customer and product contributions.
 And it has turned slightly net cash in 3Q’13.
 Based on its last closing price of 17.7 cents, its market
cap is $135mln, price to book is 0.55x, trailing PE is
11x and dividend yield based on last 3 year’s dividend
of 0.6 cents a share is 3.4%.
 Major shareholders of the company include Steven
Kent (13.6%) a non-executive director and Koh Boon
Hwee (4.86%) the company’s Chairman.
 Since bottoming-out at 8 cents at the end of 2011,
ST’s share price has been on a tear and on an intraday
basis had hit 19.4 cents yesterday, before pulling
back.

Below is a quote from Sunningdale in their management comment on 2011 full year account :

"The Group achieved a net profit of $16.7 million for FY11 compared to $18.9 million in FY10 before the impairment loss on goodwill of $23.7 million and
foreign exchange loss of $4.4 million (FY10: $5.2 million). However after these two items the Group recorded a net loss of $11.4 million for FY11
compared to a net profit of $13.7 million for FY10. The non-cash impairment loss on goodwill of $23.7 million relates to Chi Wo Plastic Moulds Fty
Limited and UFE Pte Ltd as disclosed in the announcement dated 13 February 2012."

I think Lim n Tan did not qualify the loss which is of a non cash basis and which is due to impairments. Also, it highlighted a loss of S$20 mil on 4th quarter but did not mention that the full loss was only S$11.4 mil.

And they have left out totally the most exciting part of the company ... that is, the major initiatives the company had undertaken which is one of the main reasons why I went heavy on the company. I am afraid to say that many things in the report are missing.

Anyway thanks for your post. Appreciate your efforts n deligence.

ngcheeki wrote: Lim & Tan report on Sunningdale Tech this morning.

SUNNINGDALE TECH
S$0.177- SUNN SP
 Sunningdale Tech (ST) an electronic component
manufacturer was queried by SGX due to
yesterday’s higher than normal volume of 130mln
shares traded against its usual 2-3mln.
 In response, ST’s CEO Khoo Boo Hor said that
the board is not aware of any information that
may explain the heavy trading and while the company
is currently looking at setting up a green-field
operation in Brazil, it is at a preliminary stage and
initial investment is likely to be below US$1mln,
hence would not have been the reason for the
sharp increase in share price as well as trading
volume.
 Fact is, since registering a $20mln loss in 4Q’11,
ST’s bottom-line has been gradually improving from
$1-2mln range to 3Q’13’s $3.8mln while 9 month
profit rose 38% to $9.6mln on the back of new
customer and product contributions.
 And it has turned slightly net cash in 3Q’13.
 Based on its last closing price of 17.7 cents, its market
cap is $135mln, price to book is 0.55x, trailing PE is
11x and dividend yield based on last 3 year’s dividend
of 0.6 cents a share is 3.4%.
 Major shareholders of the company include Steven
Kent (13.6%) a non-executive director and Koh Boon
Hwee (4.86%) the company’s Chairman.
 Since bottoming-out at 8 cents at the end of 2011,
ST’s share price has been on a tear and on an intraday
basis had hit 19.4 cents yesterday, before pulling
back.