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[12Invest] 12StockTalk- FRONTKN (0128) , is it at the forefront of the food

FRONTKN (0128) Stock Analysis

 
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FRONTKN was founded in a country that is very advanced in terms of
technology, SINGAPORE in the year 1996.
 
FRONTKN does business with a few countries such as Qatar, Taiwan, China ,
Thailand, Philippines, Indonesia, Malaysia and Singapore .

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Technology, an evolutionary thing that changes from time to time, so will
FRONTKN go outdated or will they come out in front with latest technologies? 
 
Firstly, we would need to dive deeper on what they do since semiconductor is
the "big thing" in terms of our economy.

 
enlightened Advanced Precision Cleaning
 
Their Advanced Precision cleaning also comes with surface treatment of
vacuum processes, equipment parts for the semiconductors and TFT industries
A.K.A (thin-film transistor) which is mainly used in LCD display flat panels.

They also do decontamination of newly manufactured parts and routine
maintenance. Also not to mention kit management of semiconductor
manufacturing components is part of their “Advanced Precision Cleaning” as
well.

 
enlightened Advanced Surface Treatment & Specialty Coating
 
Advanced Surface treatment services include thermal spray coatings, arc spray
coatings, precision anodization and precision texturing and polishing.

 
enlightened Rotating Equipment
 
Their rotating equipment is actually another term for equipment maintenance
and overhaul, mechanical fitting & assembly, dynamic balancing, heat
treatment, on site machining, metal stitching, laser alignment.

Now their segmental breakdown of their revenue. Main source of revenue in
the year 2018 is from Taiwan which amounted to 182.8mil, they have shifted
from focusing their business in Malaysia which was the highest revenue in the
year 2014 to Taiwan as they see more growth in Taiwan as compared to
Malaysia.
 
Within this breakdown we can also see that they have 3 main sectors. The main revenue for their business comes from Semiconductor as mentioned above.

enlightenedenlightened Semiconductor – 261.6mil in revenue (2018)

enlightenedenlightened Oil & Gas – 46.4mil in revenue (2018)

enlightenedenlightened Others – 19.1mil in revenue (2018)



5 Years CAGR 

enlightenedenlightened Revenue – 1.34 %
 
enlightenedenlightened Net Income - 28.62 %
 
enlightenedenlightened Net Profit Margin - 23.53 %
 
enlightenedenlightened Profit Before Tax - 28.03 %

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The Group’s semiconductor business in Taiwan, Singapore and Malaysia saw
strong improvements in their respective businesses with an increase in revenue
of 14.5%, 26.0% and 16.9% (based on their local currency) respectively in the
year of 2018 compared to 2017.


In FYE2018 they have achieved another record breaking year with its best ever
results with higher profitability on the back of a record revenue of RM327.2
million compared to RM296.6 million in FYE2017, a growth of 10.3%.
 
 
The Group’s profit after tax increased by 56.6% to RM57.0 million from RM36.4
million compared to the preceding year. Their Earnings Before Interest Tax
Depreciation and Amortisation grew by 42.5% to RM93.5 million from RM65.6
million a year ago.
 
 
The growth this year was mainly attributable to the rebound in the hard disk
sector driven by stronger demand in the cloud computing business and also
increased business from their customers that are involved in the production of
wafer for LED chips.
 
 
We wont be touching their Oil & gas and other business as the main thing in
play here is their semiconductor so we will concentrate more on that as this
could be one LONG article.

 
== Outlook for this sector ==

We don’t see a strong demand for this company's product in terms of the
technology sector in the semiconductor industry.
 
The companies that are involved in 5G technology will see a strong demand
going in 2020 onwards, where as this company has nothing to do with the 5G
and the stock price for this company has shot up way higher than some other
semiconductor companies. 
 
Though this company has quite good overall financials but the price has
inflated and we feel that there might be a bubble that is ready to POP.
 
However, who knows? The company might engage with 5G technology in
future, what do you think about the company?
 
enlightened———— Check us out ————enlightened
 
 
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#FRONTKN
#SEMICONDUCTOR
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