Friday, December 14, 2012
Biosensors: Credit Suisse assumes coverage with an Outperform rating and TP of $1.80, based on 20x FY13e P/E. Notes Biosensors redeemed 3 tranches of bonds of $48.75 m on 20 Nov 2012, two weeks before the maturity date. The covenant of the bonds has negative pledge. CS believes the urgency of mgt’s decision to redeem the bonds highlights the possibilities of a larger size of debt, and could be a signal of imminent acquisition. Recall, mgt said that they are seeking sizable acquisition targets (could be a few small ones combined). CS expects the first deal to materialise by 1H13, even 1Q13, which would become a big catalyst. Biosensors has around US$350 m cash. CS estimates the size of deals combined of over US$150 m during FYMar14, which can potentially enhance FY14/15E EPS by 10-30%. KELive notes that Street recommendations on Biosensors have been gaining momentum over the past two wks. OCBC tips technical upside to $1.30, with a fundamental Buy rating and TP of $1.69. Maybank KE has a Buy with TP $1.38. Tips more upside ahead. Nomura has a Buy with TP $1.80. Says recent M&A concerns overdone. Barclays initiated at Overweight with TP $1.50.