Broker Name: CGS International
Date of Report: March 2, 2026
Excerpt from CGS International report.
Report Summary
- Frencken Group’s FY25 revenue and net profit slightly surpassed expectations, mainly driven by strong semiconductor segment performance and stable margins.
- Management expects 1H26 net profit to rise year-on-year, but 1Q26 revenue will be lower due to inventory adjustments at a key European customer; restructuring and alignment costs are anticipated for FY26.
- The report downgrades Frencken to Hold as current share price optimism reflects anticipated semiconductor recovery in 2H26; target price is raised to S\$2.09.
- Despite 8-10% earnings growth outlook and benefit from Singapore’s Equity Market Development Programme, further price upside is seen as limited; UMS Integration is preferred for a clearer earnings outlook.
- Key risks include customer concentration, potential cost escalation, and weakening semiconductor demand; net gearing is negative, and dividend yield is modest at under 2%.
- ESG improvements are noted, with better scores for environmental, social, and governance pillars, and no workplace injuries reported in 2024.
- Peer comparison shows Frencken’s valuation in line with sector averages, but with less upside versus some peers.
- Financials indicate steady revenue and profit growth projected through FY28, with continued focus on organisational alignment and efficiency upgrades.
Above is an excerpt from a report by CGS International. Clients of CGS International can be the first to access the full report from the CGS International website: https://www.cgs-cimb.com
