Biosensors

Biosensors: +1.8% at $1.14 on strong volume, share price recovering back to pre-placement levels. Featured in Nomura’s Corporate Day last week. Key takeaways as follows,
i) mgt believes placement of new shares to Atlantis and Ever Union is positive, and will broaden the institutional base of investors, strengthen balance sheet to US$190m, which positions it well for acquisitive growth. Placement executed with the understanding of Hony Capital, which will see itself diluted from 24% to 21%.
ii) mgt optimistic abt China business, believes its JV JWMS is the no. 2 name by mkt share. Completion of the new mnftg plant in Weihai, Shangdong in the next few mths will enhance capacity and pdtivity for JWMS in China.
iii) on ASP, apart from the normal pricing reduction seen every yr, no news of significant one-off cuts by govt. In fact, the decline will likely by gradual given that the tendering process has decentralised to the provincial level.
iv) group continues to do well in EU, but mgt concedes strong growth of past few qtrs may start to decelerate as it becomes more challenging to increase BioMatrix’s mkt share from mid-teens to >20%. Expects stronger growth to come from Asian mkts, eg India, Vietnam, Taiwan.
v) BioFreedom may get CE Mark approval by FY12 (Mar end). But mgt unable to give timeline for Terumo approval, as it is subject to the Japan authorities.
Nomura has a Buy rating with $1.40 TP.