Frencken's 3Q24 revenue and PATMI grew by 7.7% and 29.3% y-o-y reaching S$198.6m and S$7.1m, respectively. 9M24 revenue and PATMI accounted for 75.4% and 67.7% of our forecast, respectively.
Revenue & gross profit were in-line with expectations, but PATMI came below expectations
- Read this at SGinvestors.io -
Frencken is still working through a backlog for its Reticle Masking (ReMa) module, a key component in High Numerical Aperture (High NA) Extreme Ultraviolet (EUV) lithography machines. Management believes that production of the ReMa module will not be significantly affected by the weaker growth expectations of its major customer and is more likely to impact older models of lithography machines.
- Read this at SGinvestors.io -
Return-to-normality pushed back to 2H25
Although we view Frencken's 3Q24 results as mildly positive, an examination of the supply chain and key customers and guidance from management suggests that anticipated growth in the semiconductor business is likely to materialise in late 2H25.
Additionally, steady growth in the medical and analytical & life sciences segments appears to have stalled, with uneven demand growth for various products within those segments.
Lowering our fair value estimate to S$1.42 but we are still confident in Frencken’s long-term prospects
Read more at SGinvestors.io.
Above is an excerpt from a report by OCBC Investment Research. Clients of OCBC Securities may be the first to access the full PDF report @ https://www.iocbc.com/.
