Frencken designs and manufactures systems for Original Equipment Manufacturers in the analytical & life sciences, healthcare, semiconductor and industrial automation markets, and offers contract design and manufacturing services to the automotive and consumer & industrial electronics segments.
What?
Think interior plastic decorative parts for cars, components for a patient table, micro motors for heart implants, water fabrication equipment for semiconductors, components for industrial automation, and so on.
They operate 18 sites with about 4.000 employees in Europe, Asia and the US, and serve customers in more than 50 countries. Google reviews of their sites in Europe by employees are positive.
Magic numbers in Singapore Dollars (S$)
In FY2021, the Group’s revenue increased 23.6% year-on-year (yoy) to reach a record S$767 million. The Mechatronics Division posted a 26.6% increase in revenue to S$659.0 million due to the growth of the semiconductor segment. Revenue at the IMS Division increased 6.8% to S$107.8 million because demand from automotive customers was constrained during the second half of the year due to semiconductor chip supply chain challenges.
- Shareholders’ equity increased to S$376.2 million, which is equivalent to a net asset value of 88 cents per share (current share price of S$1.55 is assets minus debts x 2)
- S$688M assets and S$309M liabilities
- Revenue up from 2019, discounting 2020, by 16%
- Profit up from 2019, discounting 2020, by 22%
- EPS up from 2019, discounting 2020, by 38%
- PE of 11
- Net profit on turnover is 7.7%
They acquired Avimac which already has an established customer base, certified manufacturing facilities and programs in the commercial aerospace engineering industry and cooperation with the NASA Jet Propulsion Laboratory. They acquired a controlling equity interest in Penchem Technologies that produces polymer materials.
So?
It is down from its ATH since Nov 21, so it could be a good recovery play in the semiconductor/automotive industry, and a good play for industrial automation, away from the overvalued US market.
Source: Annual Report 2021.
Thoughts?
Disclaimer: I do not own any shares.
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