Frencken Group Ltd: Technical Buy – Bottoming Out | Trendspotter Analysis (April 2025)

CGS International

April 24, 2025

Singapore Market Insights: Nanofilm Technologies & Frencken Group Analysis – April 2025

This report provides an in-depth analysis of Frencken Group Ltd and Nanofilm Technologies Int’l Ltd, offering technical and fundamental perspectives relevant to investors.

Global Market Recap

• US assets experienced a selloff following President Trump’s criticism of Jerome Powell, raising concerns about the Federal Reserve’s independence.
• Stocks, the dollar, and longer-dated Treasuries all declined, with major US stock indexes falling more than 2.5% each. The dollar index weakened to a 15-month low.
• The benchmark 10-year Treasury yield approached 4.4%.
• Investors shifted to haven assets, driving gold prices above \$3,400 an ounce and the Swiss franc up by more than 1% against the dollar. [[1]]
• The US credit market also showed weakness, with the cost of protecting high-grade credit securities against default increasing.
• Several investment-grade companies postponed bond sales due to unfavorable market conditions, with only American Express Co. proceeding. [[1]]

Nanofilm Technologies Int’l Ltd – 1Q25 Performance

• Nanofilm’s 1Q25 revenue increased by 12% year-over-year to S\$44 million, aligning with full-year forecasts. [[1]]
• Management is closely monitoring the trade tariff situation, with potential indirect impacts due to limited direct exports to the US. [[2]]
• A key negative in 1Q25 was the weak gross margin, which was over 27% compared to 33% in 1Q24. [[2]]
• Anticipation of a 90-day tariff pause may lead to increased demand from 3Q25F into 2Q25F. [[2]]
• The overall net profit outlook remains contingent on the evolution of the tariff situation. [[2]]
• Recommendation: Reduce with a lowered target price of S\$0.49. [[2]]

Frencken Group Ltd – Technical Buy

• Last Price: 1.04 [[2]]
• Technical Outlook: Bottoming out [[2]]

Key Price Levels

• Entry Prices: 1.05, 0.960, 0.900 [[2]]
• Support 1: 1.00 [[2]]
• Support 2: 0.895 [[2]]
• Stop Loss: 0.810 [[2]]
• Resistance 1: 1.13 [[2]]
• Resistance 2: 1.45 [[2]]
• Target Price 1: 1.17 [[2]]
• Target Price 2: 1.30 [[2]]
• Target Price 3: 1.50 [[2]]
• Target Price 4: 1.85 [[2]]

Company Overview

Frencken Group Limited designs, develops, and produces complex and advanced modules and systems based on precision mechanics, hardware, and software. [[2]]

Analyst

• CHUA Wei Ren, CMT [[2]]
• T (65) 6210 8612 [[2]]
• E weiren.chua@cgsi.com [[2]]

Technical Analysis

Frencken’s price action indicates strong positive momentum and potential bottoming out. [[2]]

• Successful Frencken island bottom reversal after bullish pressure over the past 9 periods. [[2]]
• Strong bullish closure above the psychological resistance turned support of S\$1.00 signals a return of bullish sentiment. [[2]]
• Prices are trending above the 9-period and 26-period conversion lines of the Ichimoku Cloud. [[2]]
• Stochastic Oscillator confirms an oversold crossover, with bullish divergence observed. [[2]]
• 23-period ROC is approaching a break above the zero line, with bullish divergence noted. [[2]]
• Volume remains healthy and expanding. [[2]]

Disclaimer

This report is prepared by CGS International and is for informational purposes only. It is not intended for distribution or use in any jurisdiction where such distribution or use would be contrary to law or regulation. The recipient is responsible for complying with all applicable restrictions and limitations. [[3]]

Restrictions on Distribution

• The report is confidential and may not be copied, reproduced, or redistributed without prior written consent from CGS International. [[3]]
• The information is believed to be correct and reliable at the time of issue, but CGS International does not guarantee its accuracy or completeness and is not obligated to update it. [[3]]
• CGS International, its affiliates, and related corporations are not liable for any consequences resulting from reliance on the report. [[3]]

Sources and Basis of Information

• The report is based on sources CGS International considers reasonable, including market data, prices, and company statements. [[3]]
• Estimates, projections, and forecasts are based on assumptions considered reasonable as of the report date and should not be construed as representations of future events. [[4]]
• Past performance is not indicative of future results. The value of investments may fluctuate, and investors may lose more than their initial investment. [[4]]

Potential Conflicts of Interest

• CGS International, its affiliates, and related parties may have positions in the securities of companies covered in the report and may engage in business with these companies. [[4]]
• Analysts certify that their views accurately reflect their personal opinions and were prepared independently. [[4]]
• Compensation of analysts is not directly related to specific recommendations or views in the report. [[4]]
• Information barriers are established to prevent conflicts of interest. [[4]]

Regional Compliance

• Australia: Distributed to “wholesale clients” only. [[4]]
• Canada: CIBC conflict of interest disclosures available online. [[4]]
• China: Marketing information only, not an offer to buy or sell. [[4]]
• France: Only for qualified investors, not a solicitation. [[4]]
• Germany: Directed at professional investors, non-binding research. [[4]]
• Hong Kong: Issued by CGS HK, licensed by the Securities and Futures Commission. [[4]]
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• United States: Distributed by CGS International Securities USA, Inc, a U.S. registered broker-dealer, to “U.S. Institutional Investors”. [[6]]

Other Significant Financial Interests

• As of April 23, 2025, CGS International has no proprietary position in the securities covered in this report. [[4]]
• As of April 24, 2025, the analyst(s) who prepared this report have no interest in the securities covered in this report. [[4]]

General Advice Warning

• The report is general in nature and does not consider the specific investment objectives, financial situation, or needs of any particular person. [[4]]
• Investors should make their own independent evaluation and consult their professional advisors before making any investment decisions. [[4]]

Recommendation Framework

• Add: Total return expected to exceed 10% over the next 12 months. [[7]]
• Hold: Total return expected to be between 0% and positive 10% over the next 12 months. [[7]]
• Reduce: Total return expected to fall below 0% over the next 12 months. [[7]]

Sector Ratings Definition

• Overweight: Positive absolute recommendation on a market cap-weighted basis. [[7]]
• Neutral: Neutral absolute recommendation on a market cap-weighted basis. [[7]]
• Underweight: Negative absolute recommendation on a market cap-weighted basis. [[7]]

Country Ratings Definition

• Overweight: Above-market weight in this country relative to benchmark. [[7]]
• Neutral: Neutral weight in this country relative to benchmark. [[7]]
• Underweight: Below-market weight in this country relative to benchmark. [[7]]

Rating Distribution

• Distribution of stock ratings and investment banking clients for the quarter ended on 31 March 2025. [[7]]
• 551 companies under coverage for the quarter ended on 31 March 2025. [[7]]