Frencken Group's stock (E28.SI) plummeted 3.29% in early trading on Tuesday, following a downward revision of earnings forecasts by DBS Group Research. The Singapore-based semiconductor component manufacturer faced pressure after analyst Lee Keng Ling highlighted concerns about narrowing net margins and moderating volume recovery across key segments.
According to the DBS report, Frencken's third-quarter earnings fell slightly below expectations due to slower-than-anticipated margin recovery. The company's outlook suggests cautious near-term earnings momentum, influenced by persistent geopolitical uncertainty, tariff risks, and softer European demand in its analytical life-sciences segment. As a result, DBS trimmed its 2025 and 2026 earnings forecasts by 8% and 10%, respectively.
Despite the bearish short-term outlook, DBS maintained a "buy" rating on Frencken, although it reduced its target price from S$2.03 to S$1.92. The significant stock price drop indicates that investors are reacting strongly to the potential for reduced profitability and slower growth in the coming years, as outlined in the analyst's report.
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