Biosensors

Biosensors: Biosensors is transitioning from being heavily reliant on licensing and royalty income to becoming a self-sustaining company that is capable of generating profits from its own operations. This seems achievable with the new corporate leadership now in place. CIMB upgraded the counter from a Hold to an Add rating in view of its improving valuations, stabilising sales environment and earnings bottom-out, while clinical trials in Japan and soon the US are important milestones to track. Its current net cash (US$272m) forms c.30% of market cap, with no immediate major acquisitions on the horizon. Biosensors is trading at 0.75x P/BV and below Asian peers' P/E FY15. CIMB does not think that there is much share price downside from hereon.