外文报告：maybank-Biosensors International：Still gaining market share-121108

SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS
Results Review
8 November 2012
Singapore
Co. Reg No: 198700034E
MICA (P) : 099/03/2012
Biosensors International
Still gaining market share

Dragged down by weaker licensing revenue. Biosensors reported
2QFY3/13 revenue of USD66.8m (+28.3% YoY, -7.6% QoQ) with
corresponding net profit of USD28.2m (+22.7% YoY, -13.7% QoQ).
Results disappointed mainly in the weaker licensing revenue (-29.4%
YoY, -17.1% QoQ) from Terumo. 1HFY3/12 net profit made up 44% of
our previous FY3/13F forecast. We maintain our Buy call but TP is
revised down to SGD1.38 as we adjust for lower 2QFY3/13 numbers.
Compensated by stronger margins. Overall gross margin was
stronger on a YoY basis at 84% from better product mix, geographical
mix and positive currency effects. However, we note that pricing
pressure would work to bring down product margins in future quarters,
which we have accounted for in our forecasts. The Beijing price tender
has once again been delayed and thus no major price cuts have been
felt yet, but this could be imminent by the end of the year.
Terumo confident of regaining market share. Weaker licensing
revenue this quarter was due to new DES product launches in Japan by
competitors. Hospitals procure the new products for initial testings,
resulting in weaker sale of Nobori Stents. However, Terumo is confident
of regaining market share from the next quarter, with intention to be
more aggressive in marketing and strong confidence in the superiority
of its product.
Licensing agreements extended. Licensing agreement with Terumo
for sale of the Nobori stent outside Japan has recently been extended
until Dec 2014. For sales within Japan, Terumo would also guarantee a
minimum flat licensing fee with additional fees for sales above a certain
threshold. We believe this is positive for Biosensors as the minimum fee
is set at a level not less than what Terumo has been paying the latter.
Maintain Buy. Biosensors is still gaining market share globally and
valuations remain attractive, especially given the recent sell-down. The
stock is trading at only 12.4x FY3/13F PER. While we cut FY3/13-15F
net profit by 5-9%, we retain our BUY rating with SOTP-based target
price lowered to SGD1.38, which implies a FY3/13F PER of 15.0x.
Biosensors International – Summary Earnings Table
FYE Mar (USD m) FY11 FY12 FY13F FY14F FY15F
Revenue 156.6 292.1 357.3 425.5 462.8
EBITDA 46.8 119.8 156.3 187.9 202.8
Recurring Net Profit 43.3 101.0 126.4 146.2 156.2
Recurring Basic EPS (US cts) 4.0 6.7 7.3 8.5 9.0
EPS growth (%) 32.0 67.8 9.6 15.4 6.8
DPS (US cts) 0.0 0.0 0.0 0.0 0.0
PER (x) 22.8 17.0 12.4 10.8 10.1
EV/EBITDA (x) 26.6 10.4 7.9 6.6 6.1
Div Yield (%) 0.0 0.0 0.0 0.0 0.0
P/BV (x) 3.2 1.4 1.3 1.1 1.0
Net Cash (USD m) 259.4 276.5 357.3 458.7 633.1
ROE (%) 16.5 48.7 10.8 11.2 10.7
ROA (%) 12.3 42.0 9.6 10.0 9.6
Consensus Net Profit (USD m) 128.4 145.1 159.2
Source: Company, Maybank KE estimates
Buy (unchanged)

Share price: SGD1.14
Target price: SGD1.38 (from SGD1.42)


YEAK Chee Keong, CFA
yeakcheekeong@http://wendang.chazidian.com.sg
(65) 6433 5730








Stock Information
Description: Biosensors develops, manufactures and
markets medical devices for interventional cardiology and
critical care procedures.

Ticker: BIG SP
Shares Issued (m): 1,728.6
Market Cap (USD m): 1,613.8
3-mth Avg Daily Turnover (USD m): 4.3
STIndex: 3,043.3
Free float (%): 54.8

Major Shareholders: %
Shandong Weigao 21.5
Autumn Eagle 15.6
Atlantis Capital 7.5
Fidelity 6.3
Norges Bank 5.0

Key Indicators
ROE – annualised (%) 10.2
Net cash (USD m): 331.7
NTA/shr (USD): 0.24
Interest cover (x): 21.5



Historical Chart

Performance:
52-week High/Low SGD1.70/SGD1.025

1-mth 3-mth 6-mth 1-yr YTD
Absolute (%)
-5.8 -8.8 -11.3 -18.6 -20.3
Relative (%) -3.8 -8.1 -14.7 -23.8 -30.7


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