We are more positive on Frencken (SGX:E28) on the back of a strong global semiconductor outlook. Key customer ASML Holding’s 1Q26 earnings saw strong bookings and continued demand for advanced lithography systems. We expect the latter’s excess inventory will clear by 1H26 and see a restock in 2H26.
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Strong outlook for the semiconductor segment in support of artificial intelligence (AI) capability.
Global tech stocks peers have re-rated amid strong sentiment for AI infrastructure and earnings. Companies including Nvidia Corp and Taiwan Semiconductor Manufacturing or TSMC reported revenue growth of 69% and 35% y-o-y for 1Q26, while ASML’s sales grew 14% y-o-y to EUR8.8bn – driven by strong AI and memory demand. It has raised its 2026 total net sales guidance to be between EUR36bn and EUR40bn from EUR34-39bn previously.
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Hence, we see the semiconductor segment, driven by AI capability, as a beneficiary of AI infrastructure spending, particularly for AI accelerators and the AI server market.
Peers have re-rated.
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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/.
