Biosensors

Biosensors: 2QFY15 net profit plunged 56% y/y to US$4.9m, while revenue decreased 10% to US$74.8m, as growth in critical care was offset by declines in interventional cardiology, cardiac diagnostic and licensing and royalties revenue. Bottom line weighed by gross profit margin which fell 3ppt to 70%, diluted by distribution activities of Nobori stents in Japan, the cardiac diagnostic businesses, as well as price reductions in various geographical locations. 1H softness was worse than expected. To minimize impact, management has appointed a new CEO reassess and improve the operational structure to improve profitability. At the same time, a new leader for the China business was appointed to strengthen the market leadership position. On the products front, enrolment of BioFreedom clinical trials in Japan and U.S is well on track. At the same time, an agreement with Terumo to distribute a private label version of Nobori stents was concluded after the expiry of the current licensing contract. BVPS of US$0.7447 translates to 0.67 P/B, and 28.8x annualized 1HFY14 P/E.