Frencken - CGS-CIMB Research 2023-11-23: Most Segments’ Revenue To Grow In 2H23

• Frencken (SGX:E28)'s 3Q23 revenue of S$184.4m (-5.6% y-o-y, +3.3% q-o-q) was at 104.3% of our S$176.8m forecast, in line with our expectation. 9M23 revenue was in line with expectations at 76% of our and 75% of Bloomberg consensus full-year forecasts.

3Q23 net profit 18.3% above our expectation

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• Frencken''s 9M23 net profit was above our expectation at 80% of our full-year forecast, but in line with Bloomberg consensus’ at 76%.
• The revenue decline in the third quarter was due to the slowdown in the semicon industry while the net profit decline was due to inflationary cost pressures and higher interest expense.

2H23F to be stable vs 1H23

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• Frencken (SGX:E28)'s 3Q23 revenue of S$184.4m (-5.6% y-o-y, +3.3% q-o-q) was at 104.3% of our S$176.8m forecast, in line with our expectation. 9M23 revenue was in line with expectations at 76% of our and 75% of Bloomberg consensus full-year forecasts.

3Q23 net profit 18.3% above our expectation

• 3Q23 net profit fell 35.3% y-o-y to S$7.1m, still 18.3% above our S$6.0m forecast. On a q-o-q basis, Frencken's 3Q23 revenue grew 3.3% and net profit grew 2.9%.
• Frencken''s 9M23 net profit was above our expectation at 80% of our full-year forecast, but in line with Bloomberg consensus’ at 76%.
• The revenue decline in the third quarter was due to the slowdown in the semicon industry while the net profit decline was due to inflationary cost pressures and higher interest expense.

2H23F to be stable vs 1H23

• Frencken guided that it expects 2H23F revenue to remain stable as compared with 1H23. The group expects cost sharing efforts with its customers in Europe to yield positive effect from 4Q23F and has entered into discussions and agreements with certain customers to allow for a more proactive approach in managing supply chain and operational costs.
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  Above is the excerpt from research report by CGS-CIMB.
  Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
  
  

  
  
  William TNG CFA CGS-CIMB Research | https://www.cgs-cimb.com 2023-11-23 SGinvestors.io
  
  

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  Previous report by CGS-CIMB:
  2023-10-19 Frencken Group - FY24-25F Outlook Likely To Improve.

  Price targets by 5 other brokers at Frencken Target Prices.

  Listing of research reports at Frencken Analyst Reports.

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