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.

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.

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