Biosensors

Biosensors: 4Q14 results came in below estimates, with net profit slumping 80% to US$6.1m taking FY14 net profit to US$40.6m (-65%). Revenue for the quarter fell 8% to US$81.6m, largely due to a 14% decline in revenue from interventional cardiology to US$63m, with the segment contributing to 77% of Biosensor's total revenue. This was partially offset by higher revenue from the group's other product segments - critical care and cardiac diagnostic – which grew 12% to US$3.5m and 73% to US$4.5m respectively. Gross margin also fell to 76% from 84% previously, largely due to distribution activities in Japan for the Nobori stents and the consolidation of the group’s newly acquired cardiac diagnostic business, both of which have lower margins. Bottom-line was further weighed by a 25% rise in sales and marketing expenses to US$29.7m and provisions of US$3.9m for restructuring, offset partially by a 58% drop in R&D expenses to US$4.3m. Biosensors noted that In FY14, the global DES market experienced increased competition and price erosion, while going into fiscal year MarFY15, the group expects these challenging market conditions to continue. Biosensors aims to however continue bringing in new innovative products, expand its existing product portfolio, and enter new geographical territories to improve its performance. At the current price, Biosenors trades at 35.5x FY14 P/E. The group remains in a healthy net-cash position of US$222.2m, representing 16.4¢ per share. Latest broker ratings as follow: CIMB downgrades to Hold from Add with TP $1.01 Deutsche maintains Sell with TP $0.64