Biosensors International Group (SGX: B20) is a medical device company that specializes in developing, manufacturing and licensing technologies for use in interventional cardiology procedures and critical care. It is also the Legal Manufacturer of BioMatrix, a drug-eluting stent that utilizes proprietary technologies of Biosensors:
- a biodegradable Poly-Lactic Acid (PLA) polymer (PLA), which degrades into the naturally occurring lactic acid
- the Biolimus A9 drug, a highly lipophilic derivative of sirolimus
- the S-Stent stent platform
- an automated stent coating technology that directly deposits the coating onto the stent surface.
(Source: Wikipedia)
Recent Financial results
For the 9-month ended 31/12/2009, Biosensors' revenue dropped from S$97 million to S$83 million which was due to a sharp drop in Licensing & Royalties Revenue (that more than offset the increase in Product Revenue). As a result, its gross profit & operating profit dropped from S$74 million to S$59 million and from S$21 million to S$14 million, respectively. However, due to a nearly 3-fold increase in Share of Results from JV companies, the company's profit after tax increased from S$10 million to S$24 million.
Table 1: Biosensors's income statement for 9-month ended 31/12/2009 (Source: Company's website)
Financial Position
Biosensors's financial position as at 31/12/2009 is satisfactory with very little borrowings (only bond payable of S$16 million as compared to shareholders' funds of S$132 million) and high current ratio of 1.7 times.
Table 2: Biosensors's Balance Sheet as at 31/12/2009
Management's earning guidance for FY10 & FY11
As per its latest results, the management expects its revenue for FY10 (FYE31/3/2010) to be about S$95-105 million. For FY11, it expects revenue to increase to S$135-145 million. (for more, go here)
Valuation
Based on the 9 months' results, Biosensors's annualized EPS is about USD0.0284 (or, S$0.0395 based on an exchange rate of USD1=S$1.39). As such, Biosensors (closed at S$0.815 today) is now trading at a present PER of 20.6 times. If we used the management's guidance for revenue increase of about 40% to estimate the EPS for FY11, we may arrive at a conservative figure of at least S$0.0550. Based on the conservative estimate, Biosensors's forward EPS is about 14.8 times. As it is based on a conservative estimate, I believe there is room for a higher PE multiple and a higher fair value for this stock.
Technical Outlook
Based on the chart below, we can see that Biosensors has recently corrected back to its long-term uptrend line support at S$68-69. Since then, the stock has rebounded. Today, it enjoyed a gain of 5.5 cents to close at S$0.815.
Chart: Biosensors's daily chart as at Apr 6, 2010(Source: SGX)
Conclusion
Biosensors is a promising company. The stock could be a good long-term investment.
17 comments:
Dear Alex,
This is an excellent report . Thank you for your hard work. I too think that Biosensors is a good potential for both middle and long term investment.
Dear Alex,
1)What is the good entry price?
Do you have this stock on your own?
2)Oh ya, l have Genting SP at S$0.91-0.92, do you think is there any chance to sell at S$1.00? Thank you for the feed back**
Dear Alex,
Do you trade US stocks?
I bought US shares such as AEN, AEZS, NENG and INSM.
It will be great if you can do write up on US stocks sometimes.
Thanks and keep up the good work!
can I trade oversea market with Kenanga? if can, i'm interested to open an account with you, do let me know, thanks
hi alex. how pantech fundamental? what is its resistance? can buy this stock?
Dear Alex,
Hope to hear from you if there is any latest info on KNM. Still waiting to dispose off at the region of .81-82. The price seems keep bottoming down...Thanks and have a good day.
Hi alex, any comment on the CMSB
Hi Kyong,
Thank you.
Hi kit,
1)What is the good entry price? Do you have this stock on your own?
Ans: Good entry level for Biosensors is S$0.70. I do not have any position in this stock.
2)Oh ya, l have Genting SP at S$0.91-0.92, do you think is there any chance to sell at S$1.00?
Ans: The stock may have broken above its medium-term downtrend line. Unless the recent low of S$0.835 is violated, the stock is likely to form a base around the S$0.90. If it can break above the recent high of S$0.875, a new short-term uptrend may have started. In which case, you may see the S$1.00 again.
Hi James,
Except for some stocks that caught my fancy, I don't cover US stocks. My plate is overflowing....
Hi Jason,
Yes, you can trade oversea market through Kenanga. If you are keen, please drop me an email.
Hi wong,
Pantech has been consolidating in a triangle with support at RM0.90 & resistance at RM0.98.
Its financial performance has deteriorated slightly. For 9-month ended 30/11/2009, its net profit dropped to RM40 mil from RM51 mil, while turnover has simialrly declined from RM372 mil to RM336 mil. With full-year EPS at about 14 sen, Pantech is trading at an attractive PER of 6.6 times.
Hi Layman,
What I know about KNM is all in the newspaper. From the chart, we can see the stock has good support at RM0.70 & resistance at RM0.80-83.
Hi cheer,
CMSB is a tightly held stock. It has a great run from RM1.80 in mid-Feb to above RM3.00 today! After such a spectacular rise, how can one get into in the stock. I don't know. I would just give it a miss.
Dear Alex,
Thanks for the comment.
I don't have Biosensors at the moment but l thought of switch to it when l sold the Genting SP. ;)
Hi Alex,
Thanks for the reply.
By the way, which US stocks do you like?
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