Sunright

[mslee888]

Profit after Tax $16,680 mill

Profit attributable to: 
Owners of the Company $9,246 
Non-controlling interests $7,434 

Can someone help to explain why non controlling interest portion can be so significant? Last year non controlling interests amounted to $5,409 while owners portion only $1,387?

Thanks

[ghchua]

Hi mslee888,

It is due to KESM actually as Sunright accounted KESM as a subsidiary but they have only 48% stake in it. Therefore, the other part of the profit is non controlling interest.

From the numbers you have given, it seems to me that KESM profit had grown again this FY, resulting in higher non controlling interests of $7,434m as compared to $5,409m last FY. But since the owners portion also grown to $9,246m this FY as compared to $1,387m last FY, it seems to me that the other segments of their business (i.e. equipment + services biz and distribution) excluding KESM had done well as well in this FY.

[mslee888]

Hi mslee888,

It is due to KESM actually as Sunright accounted KESM as a subsidiary but they have only 48% stake in it. Therefore, the other part of the profit is non controlling interest.

From the numbers you have given, it seems to me that KESM profit had grown again this FY, resulting in higher non controlling interests of $7,434m as compared to $5,409m last FY. But since the owners portion also grown to $9,246m this FY as compared to $1,387m last FY, it seems to me that the other segments of their business (i.e. equipment + services biz and distribution) excluding KESM had done well as well in this FY.

Hi ghchua 
Thanks for the explanation. Kesm has done well indeed. If sunright is to be liquidated, should we use consolidated number or just owner portion to work out the valuation?
Thanks

[ghchua]

Should take out the non controlling interest since those profits belong to the minority shareholders of KESM and not Sunright shareholders. However, in order to liquidate Sunright, we need to liquidate KESM first and since Sunright has a controlling interest in KESM, they can have a big say on who to sell to and what price to sell.

[Behappyalways]

Sunright 1H2017 results - Rev $70.1m (Increased by 9%) Earnings of $2.367m. Purchase of property, plant and equipment $13.989m

Sunright FY2017 results - Rev $147.965m (Increased by 14%). Earnings of $9.246m. Purchase of property, plant and equipment $34.954m.


Comparing 1H2017 results vs FY2017 results, there seems to be a significant improvement of results for 2H2017. For 2H2017 there is a step up in expansion with higher purchase of plant and equipment, an increased in revenue(1st half revenue increased by only 9% yet full year revenue is up by 14%) and significant increased in profit compared to 1H2017.

High probability that 2H2017 performance might be able to carried into 1H2018 and hence we should be able to see good earnings in 1H2018.

Book value on its 48% stake in Malaysian listed KESM is RM$7.65 hence NTA is $0.63. Share price of KESM is currently trading at RM$15.66.

sunright-full-year-earnings-surge-more-sixfold-booming-automotive-market
https://www.theedgesingapore.com/sunrigh...ive-market

[Behappyalways]

From Sunright FY2017 Annual Report

Dear fellow shareholders,
In 2017 we made tangible progress. The Group revenue grew by 14% to S$148 million from S$129 million in the last financial year. Our net profit increased to S$9.2 million from S$1.4 million last year. This good result has helped lift our share price by 83% for the year. All these achievements are a strong reflection that our push for innovations is delivering results. This positive momentum will accelerate as we move into the next fiscal year. Our performance was helped by a rising semiconductor market for automotive and data storage devices. We remain committed to steering Sunright in delivering innovative products and solutions to these two fastest growing markets in the chip industry. We are serving top global chipmakers, who are forerunners in the industry for many of the leading products in their respective markets. Demand for our test and burn-in equipment including our automatic handling systems has increased. We are becoming a leading supplier of automatic loaders and unloaders for logic devices with our FastrackTM gravity feed tube handlers as well as our pick and place tray handlers. As car makers add more features to chips for safety etc. and combine more infotainment applications to the dashboard like navigation, media
etc., detecting early failure of devices or burn-in and testing for new chips are imperative. We are addressing
this growing market with our next generation system, KX5, an extended design from our unique GENPOWER. No other competitors in the industry have come close to achieving a full broad range of equipment in providing test and burn-in systems with automation as Sunright. The convergence of our testing and burn-in technology with our automation technology, and the combination of our unique proprietary management information systems are essential fabrics to improving quality. This integration has opened the door to a differentiated solution achieving a higher level of quality assurance. KESM, our associate company, rides high using our “automated integrated solution” to excel in their quality and experience cost advantages to process massive volumes. Their resounding financial results continue to contribute strongly to our performance.
The car industry is fast evolving in artificial intelligence and autonomous cars. To achieve a 100% reliability
of chips with no failure is certainly challenging. Our “automated integrated solution” is taking us a step
closer to reaching this goal. Demand for chip reliability can only be greater, and the opportunities are bright for Sunright. We have started fiscal 2018 with higher expectations and greater optimism. We will continue to build our organization and culture, drive innovation and increase shareholder value.

[GenS70]

Market has voted with its feet, closed this week at 42ct, around the net cash per share that appear in analyst report

My take on why it has moved out of deep value zone (around the 30ct level)  in 1 week is due to the current market sentiment towards semicon players in SGX and a very good set of result announced by its subsi KESM

http://disclosure.bursamalaysia.com/File...TTACHMENTS

The issue with Sunright remains with the lack of profitability of its equipment biz and the lack of willingness of company to believe in investor relations, without either which Sunright's will unlikely realise its fair value, which I speculate to be above its NAV

Read the latest annual report just out this evening, look like the playbook has changed, fair value is definitely above NAV now, watch this space

[cif5000]

I thought I had a good ride on Avi-Tech until I saw the same could be offered by Sunright. Rising tide syndrome? Or is it a case of automobile becoming more auto (and less mobile)?

In whichever case, I'll go with the one that pays out the earnings as dividend and so I got my consolation.

[Behappyalways]

Sunright's 48% associate KESM FY2017 Annual Report....

Major car makers and automotive system suppliers rely on leading chip manufacturers for their advanced semiconductor devices to drive their tomorrow’s innovations in today’s cars. Electronics in cars are becoming immensely complex. It is no longer simply a mode of transportation but also acts as a centre for communication and entertainment besides increased safety features. The content of chips in cars is increasing. We are also expecting to see exponential growth rate in the global autonomous car market.

These developments are good opportunities for us. Our business is to ship reliable chips by environmentally stressing and testing chips to the high demanding standards of the car industry. KESM has nearly four decades of expertise including providing support for chips used for defence and aerospace. Our distinctive capabilities of our manufacturing scale, unique process technology and quality have enabled us to propel forward.


Car makers keep the cash flowing for the power semiconductors sector
https://www.electropages.com/2017/10/car...rs-sector/

[GenS70]

Got to work out the EV/EBITDA for Sunright!!!