Brokers' take

Sunningdale Tech | Reduce (downgraded) Target price: S$1.14 Aug 8 close: S$1.32 CGS-CIMB, Aug 8

A disappointing Q2 with revenue down 10.3 per cent year-on-year (y-o-y) and a reported loss of S$1.1 million. We were expecting a full-year net profit of S$22 million. Other than the healthcare segment, the rest of the operating segments all suffered from y-o-y revenue declines.

The ongoing headwinds are likely to continue, including rising labour costs, utility costs, price pressure and negative market sentiment in light of the global trade tensions. As the automotive segment accounted for 37 per cent of Q2 revenue, the slowdown in the automotive market, especially in China, is hurting Sunningdale Tech.