Transcu

Transcu: FY11 results. Revenue +35.1% yoy to US$11.1m. Net loss at US$16.6m exceeded revenue, but narrowed from the US$29.2m net loss last yr, on the back of a 28.8% yoy drop in operating expenses due to cost cutting and cost restructuring efforts.
Losses were mainly contributed by the Pharmaceutical segment ($5.6m).
Mgt highlights the following catalysts:

i) for the Pharma business, the co is in discussions with a major Japanese pharmaceutical coy to develop a new drug delivery device for the global market.
ii) for the Cosmetics business, the co will introduce a mass mkt range of pdt in 4QFY12. New products in the pipeline include the next generation of Ionic Passive (IP) skincare. For 4Q11, no. of shops increased from 395 to 424, which resulted in higher sales revenue despite the recent Japan earthquake.
iii) for the Green Fuel Business, the co has made significant progress in the land based applications and expects to secure its first major business of Nano-Emulsion Fuel System for land-based application in Japan. The sea trial verification test is continuing.

Stock trades at 7.8x P/B. We highlight that the co has net current liabilities of US$1.5m, net cash of US$0.6m vs 4Q11 OCF of –US$9.1m, and equity of US$15.9m.