Biosensors

Biosensors: Announced strong 3Q12 results which was in-line with bullish estimates. Rev at US$62.7m, +66% yoy and +49.6% qoq, while net profit excluding exceptional items was at $26.8m, +80% yoy and +24.7% qoq. Product gross margins at 70% was slightly down vs 75% yoy. Result brings 9M11 rev to $204.0m, +82% yoy and Core net profit to $72.4m, +101% yoy.

Strong rev attributed to Terumo Corp, grp’s licensing partner in Jap, who continued to record strong rev growth for its Nobori drug-eluting stents (DES), resulting in a more than four-fold yoy increase in licensing rev for Co.
Meanwhile, sales of Interventional Cardiology Products (IVP) recorded a yoy increase of 72% to US$58.7m, primarily driven by the Company’s flagship BioMatrix™ family of DES and the inclusion of JWMS’ results, which was consolidated into grp’s rev.

Going forward, grp remains positive on prospects, noting that 4 yr results from the LEADERS trial presented at the Transcatheter Cardiovascular Therapeutics (TCT) conference in Nov also showed improved long-term clinical outcomes for BioMatrix Flex™ in comparison to a sirolimus-eluting stent. Also aims to increase share in existing markets, via licensing rev from Nobori approval in Jap and capitalize on strong presence in high-growth emerging mkts such as China, India and Latin America.

We note that grp’s fundamentals remain strong with grp in a net cash position of $247.7m, (0.16c /share), while at current price, grp trades at an annualized 20.3x FY12E P/E. On ex-cash basis, grp trades at 18xP/E vs historical average of 44x.

Ratings as follow:
DBSV Maintains Hold with $1.68 TP.
Kim Eng Maintains Buy with $1.82 TP
Nomura Maintains Buy with $1.90 TP.