Is it light at end of tunnel for Sunningdale Tech? FY2019 had been an absolute nightmare for the Group as the precision plastic component supplier recorded its lowest profit in the past 5 years. However, based on the recent financial performance, it appears to me that the management has achieved an impressive turnaround. Will Sunningdale Tech share price storm to $2.50?
Talks of Sunningdale Tech reclaiming its former glory are not without basis as several catalysts swing in favour of Sunningdale Tech share price. Based on the recent 1HFY2020 result, net asset value (NAV) stood at $2.00. This means that Sunningdale Tech share price is being traded below its book value.
Secondly, Quarz Capital had increased its stake to become a substantial shareholder. This is definitely an intriguing development for Sunningdale Tech as Quarz Capital is known for being a activist fund which unlocked value for shareholders. In 2018, Quarz Capital had called on the management to return more cash to shareholders.
Then, on 9 September, another intriguing development unfolded for Sunningdale Tech as the Group announced that “Company had been approached in relation to a possible transaction involving the shares of the Company”. Could it be a takeover for Sunningdale Tech?
Given that the Group recorded $8.3 million for 1HFY2020, the EPS is 0.043. Assuming that the management could maintain the financial performance, the full-year EPS could be 0.086 (from FY2015 to FY2018, the Group has achieved at least $30 million of net profit consistently). Thus, applying multiple of 30, the target Sunningdale Tech share price should be about $2.60.
Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. I may be entering a small position in Sunningdale Tech, so the views contained in this article maybe bias.
Sunningdale Tech share price seeing daylight
Despite the various compelling catalysts for Sunningdale Tech share price, the thing that really caught my attention is [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
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