Frencken Group (FRKN SP)
Upward Re-rating To Continue On Structural Improvement
We believe the continued uptick in factory utilisation rates is sustainable, supported by strong demand seen by key clients of Frencken, including industry heavyweight ASML Holding. Revenue is expected to continue growing 7.4-13.8% over 2021-23, translating to a 3-year earnings CAGR of 15.5% on the back of positive operating leverage. We see bright spots emerging in the industrial automation segment. Maintain BUY with a higher target price of S$2.13.