Frencken:$1.25, a bullish gap up. The next upside target price:$1.33, 7% upside potential.

Frencken Group has been performing robustly in 2024, especially in the semiconductor sector, which continues to be a key driver of its growth. In 1H24, Frencken’s revenue grew by 6.2% year-over-year to S$372.7 million, with the semiconductor division accounting for 42% of total revenue, largely due to higher orders from a major European client and a recovery in Asian sales​.

The company also experienced a significant improvement in its gross profit margin, rising from 12.3% in 1H23 to 14.8% in 1H24. Net profit saw a strong increase of 50.3%, reaching S$18.1 million​. This momentum is expected to continue into the second half of 2024, with higher revenue forecasts, especially from the semiconductor segment, and stronger margins​

Frencken’s strategic partnerships, particularly with Applied Materials (AMAT), a key semiconductor client, further enhance its growth prospects. Frencken’s subsidiary ETLA was recognized for outstanding performance by AMAT, and the company’s positioning in Southeast Asia is expected to capitalize on AMAT’s increasing production activities in the region​

Overall, the outlook for Frencken remains positive, driven by its semiconductor business, diversified customer base, and improved operating leverage

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