Frencken (SGX:E28) reported strong FY22 PATMI of S$51.9m, above ours and consensus estimates. However, its outlook for its semi-con segment was worse than expected - despite a key customer with a great outlook - as other Asian-based semi customers are suffering slowdowns.
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Semicon segment hit by customers in Asia
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However, another similar size key customer with a large Singapore presence has a lot of existing inventory hence new orders will likely be pushed towards 2024 which will likely result in a slowdown for Frencken. It has also taken on a similar customer in Malaysia which is facing similar issues.
Hence, we believe a slowdown is inevitable for Frencken while management is guiding that 1H will be much weaker than 2H22. We expect semi-con revenue to pick up again in FY24E.
Analytical and life science a bright spark
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Above is an excerpt from a report by Maybank Research. Clients of Maybank Securities may be the first to access the full PDF report @ https://www.maybanktrade.com.sg/.
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