Biosensors

Biosensors: Nomura lower its earnings for FY14F and FY15F by 6% to reflect the higher costs the group will likely incur as it expands its product base and supports its newly acquired medical imaging business. The higher costs is expected to be mitigated by stronger revenue growth from new product launches. Nomura forecast EPS growth of 8% this year before accelerating to 15% CAGR over the following two years. Nomura reiterate its BUY rating with a TP of $1.80. Biosensors has pulled back by 9% post the 4Q results at the end of May. Valuations are attractive at 12x FY14 EPS, underpinned by SOTP valuation of $1.80 per share and net cash of USD337m ($0.25 per share). In addition, the group will pay a dividend of USD0.02/share by early August 2013. Nomura believe the SD medical imaging business will broaden Biosensors’ revenues and will likely contribute more materially from FY16. Meanwhile, house believe its core DES business will show good revenue growth underpinned by new products including Biomatrix NeoFlex and BioFreedom.