Biosensors

Biosensors: Morgan Stanley lowers TP from $0.80 to $0.65 to account for slower sales growth, deteriorating gross margins and higher selling expenses in the near term. Competition in China, Japan and international markets are stiff. Despite a gradual pick up in China volume growth, BIOS may continue to face pressures due to the lack of new products. New businesses such as Spectrum Dynamics and BioFreedom may not make any meaningful contribution in the near term. Excel has less technology advantages in China and BioMatrix may take a long time before it can enter China market. There could be potential margin erosion due to product mix and price cuts in China.