Frencken

Frencken: OSKDMG and Lim & Tan have Buy calls on Frencken this morning. Lim & Tan: Recommending a BUY on Frencken Group (30 cents, down 1/2 cent) as (a) this 60 year old electronic contract manufacturer which turned around from a loss of $12mln in 2012 to $17m profit in 2013 is expected to continue to benefit from the recovery in demand from their key automotive, medical, semiconductor and analytical customers in Europe (62% of sales) such as BMW, Continental, Bosch, GE Healthcare, Siemens Healthcare, Philips Medical, Intel, ASML and Thermofisher; OSKDMG: The recovery in Europe’s auto sector is apparent in the climb in car sales six months in a row. The sector is revving up as the market responds positively to Amtek Engineering’s bid for an auto components maker at a 21.9x FY13 P/E. However, prefer Frencken given its lower gearing and stronger business. Lift TP to $0.49, based on a 9.6x FY14 P/E and 20% discount to the peer average, as its valuation tries to catch up.