- BUY Entry – 1.62 Target – 1.81 Stop Loss – 1.52
- FRKN is a technology manufacturer providing end-to-end solutions to global clients including ASML (semiconductor), Philips (medical), Siemens (medical), FEI (analytical), Seagate (industrial automation) and ThermoFisher (analytical).
- Good 2021 results. FRKN reported its FY2021 results last Thursday. 4Q2021 PATMI rose 15% YoY to S$27mn while full-year FY201 PATMI surged 38% YoY to S$59mn. The better performance was driven by its mechatronics division whose revenue rose 27% YoY to S$659mn in FY2021 on the back of double-digit sales growth of the semiconductor, medical and analytical segments.
- Positive outlook in 1H2022. The group expects higher revenue for its semiconductor, industrial automation and automotive segments for 1H2022 compared to the previous period in the prior year. FRKN continues to expand capacity and production at its new facilities in Europe, Malaysia and Singapore.
- Consensus estimates are positive. There are 5 BUYS and an average TP of S$2.27, implying a 39% potential upside. Valuations are now cheap at 10x and 9x FY2022F and FY2023F EPS, a 28% discount to SG-listed technology manufacturing peers.
Peer comparison of Singapore-listed technology manufacturers
