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Analysts downgrade Frencken as margin pressures continue

Lim Hui Jie
Lim Hui Jie5/23/2022 12:30 PM GMT+08  • 3 min read
Analysts downgrade Frencken as margin pressures continue
Lower margins cloud the outlook for Frencken Group.
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Analysts from DBS Group Research and RHB group Research have cut their ratings on Frenken Group to “hold” from “buy” and slashed their target prices sharply.

DBS’s Ling Lee Keng cut her target price from $2.09 to $1.36, while RHB’s Jarick Seet made a deeper cut from $2.10 to $1.24.

Ling says in a May 19 note that there is “unrelenting margin pressure” on the company, with margins declining to 15.4% in 1QFY2022 ending March compared to 17.3% in 1QFY2021. Net margins eased to 6.5%, down from 8.1% in 1QFY2021.

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