Sunningdale Tech - CGS-CIMB Research 2020-03-02: Covid-19 To Disrupt 1Q Performance

SUNNINGDALE TECH LTD (SGX:BHQ) | SGinvestors.io SUNNINGDALE TECH LTD (SGX:BHQ)

Sunningdale Tech - Covid-19 To Disrupt 1Q Performance

  • Sunningdale Tech (SGX:BHQ)'s FY19 net profit in line with our expectations.
  • We think Covid-19 outbreak will affect 1Q20 negatively.
  • Upgrade to HOLD given 6.60% dividend yield support, below book valuation and with the automotive segment slowdown priced in.



FY19 in line

  • Sunningdale Tech's FY19 net profit of S$8.0m was in line with our expectation. Excluding foreign exchange losses of S$1.1m and retrenchment costs of S$1.3m, core net profit was S$11.9m.
  • A final DPS of 5 Scts was declared. Cash balance increased to S$103.4m as at end-Dec 2019 versus S$88.7m as at end-Dec 2018.
  • Net gearing was 0.1x as at end-Dec 2019, with net debt at S$23.8m.


Healthcare was a bright spot

  • In terms of segmental performance, the healthcare segment was the only bright spot with revenue up 1.0% y-o-y in FY19. The automotive segment’s revenue fell 9.2% y-o-y while the consumer/IT segment’s revenue fell 7.7%. Mould fabrication sales also fell 6.1% y-o-y.


Covid-19 likely to have a negative impact on 1Q20 performance

  • On top of the seasonally weaker first quarter due to the Lunar New Year holidays in China, we think movement restrictions and quarantine requirements due to the Covid-19 outbreak in China lowered Sunningdale Tech's output at its China factories. The automotive segment also continues to suffer from poor end consumer demand.


Upgrade to Hold






William TNG CFA CGS-CIMB Research | https://www.cgs-cimb.com 2020-03-02
SGX Stock Analyst Report HOLD UPGRADE REDUCE 1.10 DOWN 1.140



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