Sunningdale Technology

[level13]

Things I don't like about Sunningdale :
1) High debt load of 120m which puts them in a slight net debt position despite high cash level 114.8m. yes debt is being paid down compared to last year but what's all that cash sitting around doing? which leads one to speculate if the other question is if the cash is really still there?? Note market cap is only ~177m at today price and sunningdale is not a property developer.

2) Measly dividend payout historically. Shows straight up management is OPMI unfriendly. Current inceased div is only 21% payout. Combined with insider purchases it only points to management try to increase their stake whilst keeping all the profits and goodies for themselves and giving out just enough to satisfy shareholders.

-nv-

Pt 1:
Thats a valid qn. One which i cannot answer. This qn will apply to ALL companies with excess cash.
At the end of the day, for me, i only deal in probability. And for which i believe that the probability of them having the cash is much higher than those S-chip stocks.


Pt 2:
Dont think there are many people who think that they hv enough cash. 
Same logic applies for dividends...... its always not enough. However that said, investors should always qn if the dividend stream is sustainable.
There is no point giving out 20 cents dividend (which the company is able to) now and then cut to 1 cent next year due to declining profit.
Am sure investors do not welcome such volatility in dividend payout. Hence, the best move by the management is to be prudent.

FYI, the dividend payout amount has increased from $3 million in Y2010 to $9.3 million (latest announcement). This is a 300% increase over 6/7 years.
Comparatively the shares outstanding only increase 24% over the same period.

Either way i wouldnt mind if they keep holding on to the cash. The market only values them based on cash and current assests. So if the cash keeps piling up, the share px will adjust upwards similarly. And who knows, they may become an acquisition target as they are flush with cash.

[level13]

Congrats to all who are vested in this counter! The price touched an intra-day high today of $1.12, a level not seen since May 2015.

Brokerage companies and investors are starting to take notice of this company. CIMB has joined UOB KH and initiated coverage.  

http://www.nextinsight.net/index.php/sto...rget-price

This is the journey of the price movement upwards to a more reasonable level. Sit tight and enjoy the ride.

[punklitez]

Congrats to all who are vested in this counter! The price touched an intra-day high today of $1.12, a level not seen since May 2015.

Brokerage companies and investors are starting to take notice of this company. CIMB has joined UOB KH and initiated coverage.  

http://www.nextinsight.net/index.php/sto...rget-price

This is the journey of the price movement upwards to a more reasonable level. Sit tight and enjoy the ride.

Huat ah!

I agree that brokerage companies are recently starting to take notice of this undervalued gem.

Saw an article on heartlandboy.com who wrote an initiation report on Sunningdale Tech. Most FA aspects show that this counter is an undervalued gem.

http://heartlandboy.com/initiation-repor...h-limited/

[corydorus]

If you are new to this counter. I think is too late to jump in. There is no margin of safety.

[Behappyalways]

CIMB starts coverage of Sunningdale Tech at 'add' with $1.49 target
http://sgx.i3investor.com/servlets/fdnews/59300.jsp

not vested

[Big Toe]

Have a few things going for Sunningdale

1. Low plastic resin prices(at least they are not increasing)
2. Automotive sector is a great sector for them
i) A project tend to run 4-5 years, with a face lift mid way through which may generate additional revenue
ii) Volume is rather stable
iii) It is difficult to be a tier 1 automotive parts supplier as product requirement is very high and winning a project is difficult
iv) margins are usually better and less cost down than consumer products (Consumer products are the worst place to be in for these plastic companies)
3. Downside is somewhat limited at this point in time.
4. Machines can depreciate over a very long period as they can be in operation 20years or more easily.

BUT
1. Upside is probably limited as it gets closer to fair value
2. It maybe a matter of time before other lower cost companies catch up and there will be more competition and margin pressure
3. Ultimately it is a commodity type business with the tier 1 automotive choosing mainly based on the lowest cost on the spelt out requirements. There is nothing unique or special about their capabilities to command a premium.

[Rr_1]

Sunningdale has risen from 1.15 to 1.68 at this point of writing, a rise of over 40% in just under two months. It is reaching its NAV of around 1.7, could this rally finally be ending? Excited to buy in once a correction is made.

Ray

[weijian]

Sunningdale has risen from 1.15 to 1.68 at this point of writing, a rise of over 40% in just under two months. It is reaching its NAV of around 1.7, could a top be forming? Excited to buy in once a correction has formed.

Ray

Hi Ray,
I assume that is technical analysis (in bold), but pardon my ignorance if it is not. If it is, please take note that technical analysis is not encouraged on VB.com

Moderator

[CuriousWalk]

It’s unfortunate that the FX dragged down the profitability of the company in the latest results — otherwise, it would have been a >30% in profitability. I am thinking that next quarter should show an improvement because of ramp up in their Latvia plant and further optimisation.

[cyclone]

Financial Results for the Second Quarter Ended 30 June 2018 ("2Q2018")

Highlights :
* Revenue rises 2.4% yoy to S$181.9 million driven by growth across the Automotive, Healthcare and Mould Fabrication segments
* Operations at the Group's 20th manufacturing facility in Penang have commenced while pilot runs for mass production scheduled for ramp up in 2H2018 remain on track
* Outlook within each business segment remains stable entering the seasonally stronger 2H2018
* Net profit rose 18.8% yoy to S$9.7 million
* As at 30 June 2018, net asset value per share was S$2.01
* The Group maintained a cash balance of $88.3 million as at 30 June 2018 (31 December 2017: $105.3 million)
* Declares interim dividend of 3.0 Singapore cents per share.

More details in :
1. http://infopub.sgx.com/FileOpen/STL-2Q18...eID=520550
2. http://infopub.sgx.com/FileOpen/STL-2Q18...eID=520551