BioSensors

BioSensors: Reported the 2Q13 result today, with rev +28%. Drug-eluting stent (DES) sales remained strong in Europe with double-digit growth, despite the global market size seeing a single-digit decline. Licensing revenue from Terumo declined 29% YoY but it seems to be a temporary dip due to competing products launched in 1H12 but no more launches are expected in 2H12. The renewed contract term with Terumo is better than before as it has downside protection plus unlimited upside. Gross margin increased from 80.7% to 83.7% on a YoY basis. DES will account for a higher portion of total revenue, and CS expect the improvement in gross margin to be sustainable if it could continue the product mix changes. Globally, DES market continues to shrink. Boston Scientific’s DES rev saw a 24% YoY decline in 3Q12. Although Biosensors still has a much smaller market share than Abbott and Boston Scientific in the global mkt, it’s DES revenue continues to grow above 10%. Ratings as follow: CS maintains O/p with $1.80 TP. OCBC maintains Buy with $1.69 TP