FRONTKEN CORPORATION BHD (FRONTKN)

FRONTKEN: The Guardian of the World's Most Advanced Chip-Making Equipment

Most investors know FRONTKEN as an ordinary surface treatment company. But that picture is far from the truth. FRONTKEN is a mission-critical services provider — ensuring that semiconductor wafer fabrication equipment, worth tens of millions of ringgit each, remains clean, precise, and operating at nanometer-level tolerances.

Picture a TSMC fab in Taiwan producing 2nm chips. Every etching, deposition, and lithography process generates microscopic contamination that can destroy entire batches of wafers. These tools need periodic cleaning — with a precision that cannot tolerate the slightest error. That is exactly where FRONTKEN's key subsidiary, Ares Green Technology Corp (Taiwan), plays its role.

Ares Green Technology — The Crown Jewel

FRONTKEN holds 84.6% in Ares Green Technology Corp, a company operating directly inside the TSMC ecosystem in Taiwan. Ares's services include:

• Precision cleaning for wafer fab equipment components (etching chambers, CVD tools, PVD chambers)
• Maintenance, Repair & Overhaul (MRO) for semiconductor fab tools
• Specialized services for TSMC's latest advanced manufacturing nodes — 2nm, 1.6nm, and 1.4nm

This is not an ordinary cleaning service. It is a recurring, mission-critical service model — as long as TSMC operates and produces chips, Ares Green is needed. This business is extremely sticky because switching costs in semiconductor manufacturing are extraordinarily high. Mistakes are not tolerated.

Business Structure & Geography

FRONTKEN operates across four main segments:

• Semiconductors — The dominant and fastest-growing segment. Taiwan contributes ~50%+ of total revenue, followed by Singapore (~25-30%), Malaysia, and the Philippines.
• Oil & Gas — A smaller segment providing MRO services to the O&G industry.
• Power Generation — Turbine and generator equipment servicing.
• Marine — Protective coating and maintenance services for marine structures.

The semiconductor segment is FRONTKEN's true growth engine. In FY2025, group revenue hit a record RM607 million, with record net profit of RM154.2 million.

Three Simultaneous Growth Catalysts

1. Plant 3 Taiwan — A new 8-storey facility is planned. Construction is expected to begin in FY2026, completing in FY2027. This will double Taiwan's production capacity — a clear signal that management anticipates demand to continue rising strongly.
2. US Acquisition — FRONTKEN is pursuing the acquisition of a US semiconductor services company (worth hundreds of millions of ringgit, expected to close in 2026). This could be a transformational move that opens the US foundry ecosystem to FRONTKEN.
3. Kulim Recovery — The Kulim, Malaysia facility affected by a fire in 2024 has been fully restored as of H1 2025.

Shariah Compliance

✅ FRONTKEN is a Shariah-compliant stock, confirmed by the Shariah Advisory Council (SAC) of the Securities Commission Malaysia. Muslim investors can invest with full confidence.

In summary, FRONTKEN is not just a surface treatment company — it is a mission-critical services provider riding the biggest wave in modern technology: the AI semiconductor boom and global foundry capacity expansion. CEO Ng Wai Pin leads the company with long-term vision, and the financial track record proves the strategy is working.

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