In Frencken’s 1QFY2025 ended March results, its semiconductor segment accounted for 49% of total revenue.
According to research firm, Gartner, the semiconductor market is projected to grow 15.7% in 2025 to US$758.7 billion ($974.5 billion) and another 15.0% in 2026.
Industry association, SEMI, similarly expects the rebound in 2024 to continue and extend into 2026.
“The frontend semiconductor segment has not reached the peak yet while the backend segment is still in a recovery stage,” writes Ling. She notes that the group is “poised to ride” the tech rebound, backed by its strong financials and diversified portfolio.
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While Frencken’s semiconductor segment is on an uptrend, she notes that the group’s other segments “should deliver” a steady performance.
Ling writes: “With its diverse exposure to multiple market segments and sound financial position, the group is in a good position to continue riding on the recovery path ahead.”
Frencken continues to work on various programmes to facilitate ongoing knowledge transfer, support key customers’ product transfers from Europe to Asia and assist with their expansion roadmap by providing additional capacity in both regions.
To improve efficiency and capacity, the group also plans to upgrade and expand its Singapore production facilities, while a new US facility will expand production capacity to support existing business and future opportunities.
Ling’s target price is based on 20 times price-to-earnings ratio (P/E), aligning with the previous peak in 1QFY2024, on blended FY2025/FY2026 earnings.
Key risks noted by her include the group’s dependence on global market conditions, due to its global exposure to customers in the US, Europe and Asia. A broad global economic slowdown could also impact demand and earnings.
Shares in Frencken closed two cents lower 1.20% down at $1.65 on July 28.
