- We maintain our NEUTRAL call, as Frencken’s 1Q23 update indicated weak demand and higher operating costs amid on-going excess inventory in the chip sector. We see low utilisation rates from expanded capacities straining near-term margins, as the semiconductor market waits for inventory levels undergo a correction.
- - Read this at SGinvestors.io -
1Q23 net profit was below our estimate
- Frencken (SGX:E28)'s 1Q23 net profit was below our estimate, at S$5.2m (-60% y-o-y). This was booked on a lower revenue of S$173m, marking a 13% y-o-y decline from 1Q22’s S$198m.
- - Read this at SGinvestors.io -
- Meanwhile, revenue for the integrated manufacturing services division dropped by 10% y-o-y, as sales at both the automotive & consumer and industrial electronics segments declined.
- Frencken’s gross profit margin narrowed to 12.3% (-3.1ppts y-o-y). 1Q23 net profit plunged by 60% y-o-y to S$5.2m as a result of lower margins and higher costs.
Excess chip inventory continues to dominate sector trends.
- Read more at SGinvestors.io.
Alfie Yeo RHB Securities Research | https://www.rhbgroup.com/ 2023-05-24
Previous report by RHB:
2023-04-21 Frencken - Inventory Still High, Demand Remains Soft.
Price targets by 3 other brokers at Frencken Target Prices.
Listing of research reports at Frencken Analyst Reports.
Relevant links:
Frencken Share Price History,
Frencken Announcements,
Frencken Dividends & Corporate Actions,
Frencken News Articles
