The Traders

From : KGI 

Frencken Group (FRKN SP): Tech is back

• REITERATE BUY Entry - 2.26 Target - 2.50 Stop Loss - 2.15
• FRKN is a technology manufacturer providing end-to-end solutions to global clients including ASML (semiconductor), Philips (medical), Siemens (medical), FEI (analytical), Seagate (industrial automation) and ThermoFisher (analytical). 
• The force is strong.  Based on the recent quarterly results and outlook commentary of semiconductor giant TSMC, the upstream segment of the sector is likely to benefit from positive tailwinds for at least another 2 years. TSMC commented that it is seeing booming demand for its products and services and that supplies will likely remain tight going into 2022. The second positive point is that TSMC will build a new plant in Japan, in a JV with Sony Corp. As a recap, TSMC plans to spend about US$100bn over the next three years to expand its manufacturing capacity and to support R& D. 
• Diversifying into aerospace.  While the aerospace sector was hit hard by the Covid-19 pandemic, there are signs that it is turning around. It is in this context that Frencken has made a timely acquisition of Avimac Pte Ltd, an aerospace and semiconductor-focused company, for a total sum of S$14mn. The acquisition, while tiny relative to Frencken&rsquo s current market cap, will help Frencken gain access to new customers and get a foot into the recovering aerospace sector. 
• Consensus estimates are positive.  There are 5 BUYS and an average TP of S$2.59, implying a 14% potential upside. Valuations are still decent at 16x and 14x FY2021 and FY2022 EPS. 
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adelinesoh      ( Date: 20-Oct-2021 10:33) Posted: Panda Senpai From Fei Lao' s view, doesn' t seems like there is much to profit from this at the current stage. Most people would have already made a pile while catching at the lower points previously.... fatpanda      ( Date: 20-Oct-2021 09:56) Posted: Sis, " Fei Lao" ' s view on " Fried Chicken" if the wave count is correct.... Hehehe......