We remain upbeat on Frencken on the back of the growth across its semiconductor and medical segments. 1H25 revenue showed continued growth from its mechatronics division, led by the semiconductor and medical segments.
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1H25 earnings in line.
Frencken reported earnings of S$20m (+10% y-o-y) on the back of S$432m revenue (+16% y-o-y). Revenue growth was driven by the mechatronics division, which grew 19% y-o-y to S$389m, offset by an 8.4% y-o-y decline in the integrated manufacturing services (IMS) division to S$41m.
Revenue growth in the mechatronics division was broad-based and mainly supported by the semiconductor segment, which grew 38% y-o-y to S$216m. It saw a rebound in sales in its Asia operations and booked stable sales from a key European customer. There was demand recovery in Asia, as well as better sell-through from a broader product portfolio.
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The industrial automation segment grew 20% y-o-y from increased orders by its key data storage customer. The IMS division’s revenue decline was affected by lower automotive and industrial electronics segment sales.
Gross profit margin was lower at 14.1% from 14.8% due to higher costs in Europe.
Expect outlook to remain positive.
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Above is an excerpt from a report by RHB Securities Research. Clients of RHB may be the first to access the full PDF report @ https://www.rhbtradesmart.com/.
