According to Seet, Frencken is now limited by larger-size clean rooms here, which limits what it can do for one of its key customers in semiconductors.
By building larger clean rooms in the new Kaki Bukit facility, Frencken can then scale up its portfolio for such customers, and help shift work now done in Europe to Singapore.
"This would also point to higher margins due to lower production costs in Singapore as compared to Europe," says Seet.
"We continue to like Frencken and believe it will remain a key beneficiary of the recovery in the semiconductor industry. Its Singapore expansion bodes well amid on-going uncertainty created by the threat of higher US tariffs war due to tensions between the US and China," says Seet.
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He values this counter based on 13x FY2026 earnings, leading to a target price of $1.34.
"Frencken remains our top Singapore tech pick," says Seet.
Frencken shares changed hands at $1.17 as at 10.32 am, up 1.74%.
