SINGAPORE (June 24): UOB Kay Hian has initiated coverage on Frencken Group with a “buy” call and target price of $1.15.

In a Tuesday report, analyst Clement Ho says he likes the high-tech component manufacturer for its stable earnings due to its diverse revenue stream, despite the temporary pandemic-induced slowdown, which has affected manufacturing plants around the world.

Despite expected lower sales in 2020, Ho forecasts the company’s operating margin to normalise above 11%, compared to the sub-9% region between 2014 and 2017. The higher margin is due to cost-cutting measures and efficiency improvements.

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