The company plans to pay a first and final dividend of 2.75 cents per share, equivalent to a payout ratio of 30%.
According to Yeo, Frencken's semiconductor segment previously slowed in 3QFY2025 due to excess inventory in its customers’ channels. In the most recent 4QFY2025, a recovery has started and is seen to extend into 2HFY2026.
"While the outlook remains positive for Frencken on the earnings front, there is also optimism in the market’s positive fund flows, which has led to Frencken’s rerating," says Yeo in his March 19 note.
Yeo observes that Frencken's peers, since last May, have already re-rated from 12-16x forward P/E to around 24x now.
"In view of the firm earnings outlook, fund flows, and higher liquidity in the Singapore market, we now peg the stock from 19x to 24x FY2026 earnings, which is the peer average," says Yeo.
Frencken Group shares, as at 3.14 pm, were down 1.94% to $2.02. It is up 83.64% in the past year.
