- As both of its local peers reported disappointing results, we believe Frencken (SGX:E28) is the best proxy of recovery of the semiconductor industry (even for FY24E), and it remains our Top Pick in the Singapore tech sector.
- - Read this at SGinvestors.io -
Positive 2H24 outlook
- Frencken's management expects higher revenue in 2H24E and it also expects revenue from the semi-con segment to be stronger in 2H24E than 1H24.
- This is positive as semi-con typically yields higher margins, which were reflected in 1H24 gross margin increasing to 14.8% from 12.3% a year ago. As a result, we expect Frencken's profitability to be stronger in 2H24 vs 1H24.
Expect higher gross and net margins in 2H24E
- - Read this at SGinvestors.io -
- There is also some orders which we estimate to be around S$20-80m from a key semi-con customer which was delayed into 3Q24E from 2Q24E which would like boost margins in 2H.
Huge potential with semi-con clients – AMAT & ASML
- Read more at SGinvestors.io.
