Biosensors

Biosensors: CITIC PE has decided to not proceed with any take-over transactions at this point of time. Nevertheless, CITIC PE remains committed to cooperate with the company to enhance its investment position in Biosensors. With this news, there seems to have not much conviction to own Biosensors anymore, especially in the nearer term. Recall, latest 1QFY15 results were disappointing, as bottom line slumped 18% to US$9.9m, on lower ASPs and rising costs from new businesses and higher R&D expenses. Competition is also intense, as Biosensors loss market share from Abbott, whilst facing price cuts from various geographic regions. Whilst management is trying to diversify its revenue base into non-drug-eluting stent businesses, investors should take note that ramp up time is likely required for these revenue contributions to be meaningful. Meanwhile, Biosensor’s pale outlook is also compounded by a mid-cycle crisis between a pre-takeoff from BioFreedom and a maturing BioMatrix DES. Biosensors is currently trading at 19.4x forward P/E and 0.8x P/B