SINGAPORE (Oct 28): NRA Capital has assigned a preliminary “overweight” rating to Sunright, with a fair value estimate of 48 cents. This represents a 41% upside based on its share price of 34 cents as at 3.41pm on Friday.

In Malaysia, Sunright’s semiconductor burn-in, testing and electronic manufacturing (BIT&EM) services are provided through its 48%-owned subsidiary, KESM Industries, which is listed on Bursa.

“Sunright’s shares in KESM and net cash have a value of 75.3 cents per share. In contrast, Sunright currently trades at 33 cents, less than the value its shares in KESM,” says NRA analyst Liu Jinshu in a report on Thursday.

Liu adds that Sunright’s share price is depressed by unprofitable entities, but profitability may improve on absence of lumpy items.

“The group suffered a $1.2 million write-down of inventories and a $0.8 million exchange loss in FY16 that were absent from KESM,” says Liu. “If these costs were to be saved in FY17, Sunright’s profitability may potentially be higher.”

Shares of Sunright are trading lower at 34 cents,