This was mainly due to higher raw material prices, higher costs incurred to mitigate supply chain disruptions, and higher operating costs from inflation. As such, he expects the margin pressure to continue into 2QFY2022, before improving in 2HFY2022.
CGS-CIMB’s William Tng has maintained his “add” rating on Frencken Group, although he has cut his target price on the stock to $1.72 from $1.77.
In a July 4 note, Tng points out that in its 1QFY2022 ended March, Frencken’s gross profit margin and net profit margin stood at 15.4% and 6.5% respectively, compared to 17.2% and 8.1% in 1QFY2021.
