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Many people said that frontken price going up and down. Other technology company price gap up but why frontken still stuck at here? (Around RM3.3-RM3.5).
In personal point of view, I reckon that frontken will go better in the future. Time will prove. Don’t forget that frontken has grown from a penny stock to a good technology company in a year. In their financial report, director of frontken mentioned that “Wanting not huge revenue jumps, but instead in steadily increasing in margin”. And YES! Since 2015, Frontken net profit margin has increasing year over the year.
Some people saying that when Nasdaq rise Frontken drop, when Nasdaq drop Frontken also drop. Well, it is undeniable that US stock market will definitely affect the whole world stock. BUT, it seems to me that US stock market is not the thing that we should consider too much. US market gap up doesn’t mean that the whole world market will gap up as well.
Frontken major business income is from TAIWAN. Frontken subsidiary Ares Geen Tech in Taiwan is actually the business partner of TSM (Taiwan Semiconductor Manufacturing). TSM is the largest semiconductor company in the world and providing semiconductor supply to AMD, Apple, Nvidia, Qualcomm and the list goes on. On the other hand, Ares Geen Tech provide surface treatment to those semiconductor created by TSM. Surface treatment ensure that the semiconductor will last longer. TSM and Frontken have a good business relationship. Since TSM increasing their revenue income hugely, of course Frontken will get tremendous benefit from it.
Overall, I reckon that Frontken is a very good company and will go well in the future. Stock price rise and drop, it is really a normal scene y’all.
Happy Trading!
Disclaimer: BUY AT YOUR OWN RISK. THIS STATEMENT DOES NOT INCLUDE ANY BUY OR SELL ADVICES.
First of all, I’d say that TSM and Frontken are two different type of business. We can’t compare their PE directly. TSM is the producer of semiconductor while Frontken is an engineering company that provide surface treatment to semiconductor. For example, car manufacturer and car mechanic are different type of jobs right? Although they are from the same sector.
Besides, different people have different point of view. Some people feel like PE40 is high but some people can accept higher PE for the particular company. Higher PE mean the investor are willing to pay higher price to buy the share as they expecting higher earnings growth in the future. Typically, PE of Technology Company in Malaysia is around 30-80. It’s really depend on what you feel and expect the growth of the company in the future. Even Focus Dynamics Group Berhad have a PE of 960+ but still have investor willing to pay for the price.
Happy Trading!
Disclaimer: BUY AT YOUR OWN RISK. THIS STATEMENT DOES NOT INCLUDE ANY BUY OR SELL ADVICES.
But frontken’s biggest customer TSMC is only expected to grow its earnings by 10x to 20x which means frontken’s earnings are limited to that growth instead of 40x, isnt it?
No ya. I don't think that TSM earnings will be constraint. Demand for semiconductor is increasing rapidly and growing use of AI will contribute significantly to the industry’s overall growth. Demand of semiconductor is now greater than its supply. In 2021,TSM plan to increase the price of semiconductor due to the shortage of supply. In November 2020, Ares Geen Tech had also added new production lines to better cope with the existing increasing demand.
