Stock Analysis: Frencken Group | Lianhe Zaobao
Frencken Group recommends buying, with a target price of 1.80 yuan and a closing price of 1.47 yuan. The company's net profit for the first nine months of this year was 29.8 million yuan, a year-on-year increase of 9%. The performance improvement is due to a 13% increase in revenue and stable net profit margins. Revenue grew by 7% in the third quarter, driven by the semiconductor, medical, and industrial automation businesses. The semiconductor business was affected by ASML order adjustments, but the company is confident in its long-term growth prospects and is prepared to seize the development trends in the chip industry. The Asian electromechanical integration business will expand its market share
Frencken Group
- Recommendation: Buy
- Target Price: 1.80 CNY
- Closing Price: 1.47 CNY (+1.38%)
Frencken achieved a net profit of 29.8 million CNY in the first nine months of this year, a year-on-year increase of 9%, in line with our expectations. The improvement in performance was mainly driven by a 13% year-on-year increase in revenue and stable net profit margins. The group's revenue in the third quarter grew by 7% year-on-year, primarily driven by three main business segments, including semiconductor, medical, and industrial automation.
The company expects that revenue from the semiconductor business will be affected by order flow adjustments from ASML, as the latter anticipates that end-market demand will moderate. However, Frencken is confident about its long-term growth prospects, and with strong partnerships with market-leading clients, the semiconductor division is well-prepared to capitalize on the long-term upward trend in the chip industry. The company's mechatronics business in Asia will also leverage the recovery momentum to expand its market share. (UOB Kay Hian)
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