#MoneyDodo indirectly benefits from FRONTKN's AI.
#Oil & gas technology dual engine.
#Holding cash waiting for good acquisition opportunities.
There are several companies in Malaysia that do not directly benefit from AI, but indirectly benefit. One of them is FRONTKN, because its main customer is Taiwan's Hushan TSMC. One of TSMC's customers is an AI company, NVIDIA, so FRONTKN indirectly serves TSMC and NVIDIA. This statement may sound far-fetched, but the stock price is the best proof. FRONTKN has risen 26% this year (although FY23 earnings have declined by 9.2%), and major customer TSMC has risen 41.5%.
In addition to the recovery of the technology business in 2024, the oil & gas business also accounts for 20% of the total business. Therefore, the main customer PETRONAS will continue to increase its CAPEX this year, and FRONTKN will have another busy year.
Technology + energy oil & gas = growth in 2024.
In 2021 and 2022, FRONTKN bought land in Kaohsiung, Taiwan to build a new factory to meet the needs of its major customers. Although 2023 is a downturn cycle, the previous expansion can finally contribute in 2024.
As the CAPEX enters its final stage in 2022, the CAPEX in 2023 only spent RM15.1 million, distributed dividends of RM40.845 million, and the expenses were not significant. Therefore, with the savings in 2023, the Net Cash has reached a new historical high of RM419 million.
The company's dividend yield is not high because technology companies focus more on growth. It is expected that the company's profits this year will have strong double-digit growth. Furthermore, FRONTKN revealed in an interview a few years ago that they do not rule out acquiring new companies to expand their business map. The company has cash of RM0.42 billion, and assuming they can find a suitable seller, the company may challenge the RM200 million PAT mark in 5-6 years.
If you want to learn more about the essence and key points of the financial report, #36 Financial Strategies can help you. Click on the comment section to learn more details.
#Holding cash waiting for good acquisition opportunities.
There are several companies in Malaysia that do not directly benefit from AI, but indirectly benefit. One of them is FRONTKN, because its main customer is Taiwan's Hushan TSMC. One of TSMC's customers is an AI company, NVIDIA, so FRONTKN indirectly serves TSMC and NVIDIA. This statement may sound far-fetched, but the stock price is the best proof. FRONTKN has risen 26% this year (although FY23 earnings have declined by 9.2%), and major customer TSMC has risen 41.5%.
In addition to the recovery of the technology business in 2024, the oil & gas business also accounts for 20% of the total business. Therefore, the main customer PETRONAS will continue to increase its CAPEX this year, and FRONTKN will have another busy year.
Technology + energy oil & gas = growth in 2024.
In 2021 and 2022, FRONTKN bought land in Kaohsiung, Taiwan to build a new factory to meet the needs of its major customers. Although 2023 is a downturn cycle, the previous expansion can finally contribute in 2024.
As the CAPEX enters its final stage in 2022, the CAPEX in 2023 only spent RM15.1 million, distributed dividends of RM40.845 million, and the expenses were not significant. Therefore, with the savings in 2023, the Net Cash has reached a new historical high of RM419 million.
The company's dividend yield is not high because technology companies focus more on growth. It is expected that the company's profits this year will have strong double-digit growth. Furthermore, FRONTKN revealed in an interview a few years ago that they do not rule out acquiring new companies to expand their business map. The company has cash of RM0.42 billion, and assuming they can find a suitable seller, the company may challenge the RM200 million PAT mark in 5-6 years.
If you want to learn more about the essence and key points of the financial report, #36 Financial Strategies can help you. Click on the comment section to learn more details.
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