Frencken’s earnings grew 5% y-o-y despite revenue for the period falling 2.3% amidst difficult Covid-19 business conditions and a $6.2 million impairment loss relating to deferred development costs on a product not yet launched. The better earnings are due to grants and lower than expected foreign exchange losses and effective tax rate.
Maybank Kim Eng analyst Gene Lih Lai has maintained his “buy” call with an unchanged target price of $1.39 for Frencken Group on the back of stronger-than-expected semiconductor and industrial automation contributions in FY2020 and FY2021.
The positive recommendation also follows the company’s 2HFY2020 results, including earnings of $23.8 million which exceeded Lai’s expectations.
