BioSensors

BioSensors: Announced a decent set of 2Q11 results which was however short of bullish street estimates. Rev at US$62.2m, +71% yoy and +8.9%qoq, while net profit at US$22.9m, +171% yoy and +2% qoq. Gross margins at 80% remained healthy vs 78% yoy, lifted up by a higher proportion of licensing revenue.

Rev was driven by strong sales of grp’s Interventional Cardiology Products (IVP) which recorded robust yoy increase of 31% at US$38.4M, driven by the strong sales of Co’s flagship BioMatrix, while Terumo Corporation, grp’s licensing partner, continues to record strong rev growth after it commenced sales of the Nobori DES in Japan in May.

Going forward, grp remains positive on prospects and will continue to expand mkt share in all the territories where BioMatrix is currently available, add that JWMS acquisition has been completed and would be consolidated into Biosensors’ financials from 2HFYMar12. Co. is also in the process of applying for tax incentives which could reduce its effective tax rate from about 25% to 15% and would also be retrospective if approved by the end of this yr.

We note that grp balance sheet remains strong, with grp in a net-cash position, while at current price, grp trades at 16.4x FY12E P/E.
Kim Eng downgrades to hold with $1.49 TP, noting that grp appears fairly valued at its SOTP based TP.