Frencken - RHB Research 2026-02-06: Expecting A Better Outlook Ahead; Maintain BUY.

• We turn more bullish on Frencken (SGX:E28)’s earnings from more robust growth outlook, strong economic fundamentals in Malaysia and Singapore, and supported by firm 2026 growth prospects from its key customer ASML.
• - Read this at SGinvestors.io -

Firm growth outlook for the sector and key customer ASML.

• Based on SEMI’s forecast, global sales of total semiconductor equipment by OEM manufacturers are expected to touch US$133bn in 2025 (+13.7% y-o-y), reaching US$156bn in 2027 and growing at an 8% CAGR over the next two years. The wafer fab equipment segment has been estimated to grow at 11% y-o-y to US$115.7bn in 2025, and projected to grow at 8% CAGR to US$135.2bn in 2027.
• - Read this at SGinvestors.io -

Positive external macroeconomic outlook for Malaysia.

• Our RHB Economics team is of the view that tariff risks will ease, supporting global trade and demand, fuelling a more positive manufacturing and export outlook. Our economist forecasts Malaysia’s 2026 GDP growth to remain strong at 4.7%, from 4.9% in 2025. The team expects accelerating 2026 Industrial Production Index (IPI) at 4.1%, from 3.6% in 2025, contributed by domestic and global growth, including technology upcycle demand for E&E. The team also estimates Malaysia’s exports to grow at 9.3% in 2026, outpacing 6.5% in 2025, based on strong global demand as well.
• In addition, our Singapore economist expects full-year industrial production to grow at 4.0% in 2026, benefitting from firmer electronics and non-electronics exports, positive spillover from the ongoing global electronics upcycle, and resilient regional demand.

Raise earnings and target price on buoyant outlook.

• Read more at SGinvestors.io.

Alfie Yeo RHB Securities Research | https://www.rhbgroup.com/ 2026-02-06

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