By augustine16 //
September 22, 2023

Excerpts from MayBank report

Frencken Group Ltd (SGX: E28)

Worst should be over

We think that the worst should be over for Frencken and 1Q23 should be the bottom in terms of financial performance for FY23E.

Like other semicon manufacturers in Southeast Asia, FY23E will be a weak year due to excess inventory its clients have and a general slowdown across the semicon space.

We believe that with new projects on-board, Frencken should enjoy better quarters ahead.

Well positioned to benefit from a semi-con recovery

Management expects inventory levels to only normalise in 4Q23 but this might be hastened if strong demand for artificial intelligence (AI) chips continues.

If this happens, Frencken will likely benefit as an increase in orders from its key customer would likely ramp up utilisation and allow it to enjoy the operating leverage it had in FY22.

While Frencken is still focusing on its investments in programs for existing and new customers, we believe that it will be well-positioned to capitalise on a recovery in semi-con demand in FY24E.


Frencken is due to report its 2Q23E results on the second week of Aug and we expect a marginal improvement on 1Q23 with revenue at SGD180m and NPAT at SGD5.7m.

We think 1Q23 should prove to be the worst quarter and better quarters lie ahead. We also believe that most of Frencken’s weak FY23E outlook is priced in the shares.

It is one of a handful of semi stocks trading below its NAV, at SGD0.93/sh. As a result, we maintain our BUY with an unchanged TP of SGD0.94, pegged to 9x FY24E PE.

Frencken share price chart
Frencken share price chart

You can find the full report here and the company website here

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