Frencken Group, a global integrated technology solutions company, is set to benefit from positive developments in the semiconductor sector, leading to a revised target price of S$2.08, a 49% increase. The company is expected to report second-quarter 2025 earnings of S$10 million, marking a 10% year-on-year growth, driven by revenue growth in the semiconductor segment and improved gross margins, UOBKayHian said in a report.
The semiconductor industry has shown promising indicators, including the US allowing Nvidia to sell its H20 AI chips to China, TSMC’s 61% year-on-year increase in Q2 2025 earnings, and Samsung’s $16.5 billion (US$16.5 billion) deal to supply chips to Tesla. These developments are expected to positively impact Frencken’s key customers, further boosting the company’s outlook.
Frencken’s strategic initiatives to develop balanced capabilities across its global sites have positioned it well to leverage its infrastructure in Asia, Europe, and the US. This enables the company to offer “local-for-local” solutions and diversify its supply chain, mitigating potential disruptions from tariff uncertainties.
The company’s financial estimates remain unchanged, with a maintained “BUY” recommendation. Frencken’s ability to outperform peers due to its manufacturing capabilities and geographical diversity underpins the increased price-to-earnings multiple peg from 15x to 21x. The company’s resilience is further supported by its market diversity and strong partnerships with industry leaders.
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