Frencken - OCBC Investment 2024-08-19: For The Long Haul

Frencken - For The Long Haul

Published:
Frencken (SGX:E28) | SGinvestors.io
  • Frencken's 1H24 revenue and PATMI grew 6.2% and 50.3% y-o-y to S$372.7m and S$18.1m, respectively. However, on a h-o-h basis, revenue and PATMI fell by 4.4% and 11.1% respectively.

Stronger y-o-y but weaker h-o-h due to timing in orders

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  • Furthermore, delays in shipment within the semiconductor segment and temporary spending delays from customers in other segments affected the results for 2Q24.
  • Despite these challenges, Frencken's management expressed optimism for 2H24 and the long-term outlook, emphasising that these issues are primarily related to timing rather than fundamental concerns.

Operating margins to expand as semiconductor segment grows faster relative to other segments and supply chain diversification bears fruit

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  • Management also guided that they have started working with key customers to shift production into Asia, where the cost of labour and taxes are significantly lower. However, it will still take time for their factories in Asia to gain traction and prove its capabilities.
  • In the long run as supply chains continue to diversify into Asia, Frencken’s factories should see better utilisation rate, and consequently higher profit margins.

Strong anchors in its diversified revenue streams

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Above is the excerpt from report by OCBC Investment Research.
Clients of OCBC Securities may be the first to access the full report in PDF @ https://www.iocbc.com/.




Donavan Tan OCBC Investment Research | https://www.iocbc.com/ 2024-08-19



Read also OCBC's most recent report:
2024-11-21 Frencken - Cultivating Growth Levers To Position For A Turnaround.

Price targets by 4 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





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