• 1H25 revenue/PATMI were within our expectations, at 49%/48% of our FY25e forecasts. 1H25 revenue/PATMI increase of 20%/9% YoY was driven by strength in the semiconductor segment, due to stable sales growth to a key European customer and a rebound in Asia sales. Frencken&rsquo s outlook for its semiconductor segment is more muted due to potential order volatility from its customers. Nonetheless, we remain optimistic about the demand for advanced chip equipment components over the next two years, driven by Hyperscalers&rsquo strong demand for AI chips and rising sovereign AI investments.
• Frencken held its groundbreaking ceremony for its upcoming manufacturing facility in Kaki Bukit on 12 Aug 2025. Construction of the S$63mn facility is expected to be completed 1Q27. The facility is 1.4 times the size of Frencken Mechatronics Singapore&rsquo s current combined operations in Changi North and Seletar Aerospace Link, and will eventually consolidate its Mechatronics operations in Singapore.
• We maintain BUY with unchanged TP of S$1.76. Our FY25e revenue/PATMI forecasts are unchanged. Frencken&rsquo s current valuation is attractive at 16x historical P/E, compared to its local peers&rsquo 28x historical P/E. We view Frencken&rsquo s CAPEX in its upcoming manufacturing facility positively, as the new facility can enhance Frencken&rsquo s operational efficiency and enable it to handle more complex projects at a larger scale.

Revenue for the period is up 15.7% year on year to S$431.4 million

 

[SINGAPORE] Semiconductor player Frencken : E28 -3.14% on Thursday (Aug 14) reported a 9.9 per cent increase in profit to S$19.9 million for the first six months ended Jun 30, from S$18.1 million in the year before. 

 

Revenue for the period rose 15.7 per cent to S$431.4 million, from S$372.7 million in the year-ago period. The increase came from the higher revenue from Frencken&rsquo s mechatronics division, which offset the fall in revenue from the IMS division over the same period. 

 

Revenue for the mechatronics division rose 19 per cent to S$389.3 million in H1 2025, driven mainly by higher revenue contributions from the semiconductor, medical and industrial automation sub-segments.

 

Revenue for the IMS division slid 8.4 per cent to S$40.6 million, mainly as a result of lower contributions from the automotive, as well as consumer and industrial electronics sub-segments. 

 

Sales to automotive customers fell 8.8 per cent year on year to S$29.2 million. The other sub-segments under the IMS division also registered softer revenue of S$8.8 million in H1 FY2025, down 8.3 per cent from a year ago. 

 

The group said that it maintains a &ldquo cautious stance&rdquo amid current global market conditions.

 

It added: &ldquo While more clarity on tariff deals with the USA emerged after Aug 1, 2025, the business operating landscape is envisaged to remain challenging in the near term.

 

&ldquo Volatility in the macroeconomic environment is weighing on business confidence and dampening investments, as corporations worldwide reassess and reconfigure their manufacturing supply chains to navigate an evolving global trade landscape.&rdquo

 

The group recorded earnings per share of S$0.0467 in H1 FY2025, up from S$0.0425 cents in the year before.   

In the first five weeks of Q3 2025, Frencken Group booked S$20.3 million of net institutional inflow, which represented 2.8 per cent of its S$713 million market capitalisation as at Aug 7. 

 

Over the period, the share price of Frencken Group rallied 35 per cent, while analysts from DBS Group Research and CGS International and Maybank Investment Banking Group increased their target price on the stock. Phillip Capital also initiated coverage in July.

 

The global technology solutions provider to leading multinationals across aerospace, life sciences, automotive, healthcare, industrial and semiconductor sectors will release its H1 FY2025 results (ended Jun 30) on Aug 14.

 

On Jun 3, Frencken Group&rsquo s subsidiary ETLA entered into a land lease agreement with JTC Corporation to develop a new manufacturing facility in Singapore, aimed at expanding and consolidating its mechatronics operations while enhancing capacity, efficiency and long-term growth potential. 

 

The group said that the new facility will boost productivity and expand capacity, particularly for larger cleanrooms, to support programme transfers from Europe and scale up its business with key wafer fabrication equipment customers.

 

On May 20, Frencken Group reported that its Q1 FY2025 (ended Mar 31) revenue rose 11.5 per cent from Q1 FY2024 to S$215.8 million, driven by stronger contributions from its mechatronics division, while net profit grew 12 per cent to S$10 million on improved operating leverage and a higher gross margin of 14.8 per cent.