Frencken Group Limited, an investment holding company, operates as a capital and consumer equipment service provider primarily in Asia and Europe. The company offers integrated one-stop outsourcing solutions. It operates in two divisions, Mechatronics and Integrated Manufacturing Services (IMS).
This wouldn’t be a dividend play in my opinion. The 0.014 dividend in 2014 doesn’t seem sustainable. I feel that the company would do better by keeping the money and growing the company instead. Holding onto a good sizeable amount of cash would be better for them seeing that their cash holdings is low and if they could reduce their debt levels, even better!
Currently price is at 6-year trendline support level (0.21). This is the third time the support line is being tested. Trend channel is visible with resistance at 0.39-0.40. This provides an opportunity for 100% capital appreciation if held for 1-2 years.
Total Revenue: Increasing y-o-y
Gross Profit: Seen 100% increment from 2013 and manages to sustain and improve!
Net Income: No growth in this area, but does offer some hope for improvement.
Total Assets: Growing well
Long-term Debt: Remains low, a thing that I like!
Current Liabilities: Ballooned this year, largely due to the spike in Trade Payable and some borrowings in 1Q and 2Q 2014 respectively.
Retained Earnings: Good and sizeable amount, leaves plenty of room for opportunities.
ROA and ROE ratios are nothing fantastic
Net Income margin lies at 3%
Debt Ratio below 30%, a healthy level in my opinion!
P/B Ratio of 0.443 is great for value investors
I like this company not so much for the fundamentals, but more for the technicals. Fundamentally this company does not seem to have much of a problem. At current price level, it seems like a very attractive price to pay for a great value! A 50% discount from book value, not an easy find!
The current problem why the share price is so depressed is likely because there is no President to run the Group. In recent times however, we can see that the Group is actively taking measures to look for a suitable candidate through the “Select Committee to identify and shortlist suitable candidates to serve as President of Frencken Group”. We can see that the price seems to just be resting until a new President spearheads the Group.