Monday, January 31, 2011

Biosensors - Biosensors off 1.8% in weak market; result strong - OCBC

Stock Name: Biosensors
Company Name: BIOSENSORS INT'L GROUP, LTD.
Research House: OCBC


Biosensors (B20.SG) off 1.8% at $1.12, falling along with the broad market despite posting yearly and sequential gains in earnings. 3Q revenue rose 31.8% on-year, 16.8% on-quarter to US$42.6 million ($54.8 million), net profit rose 7.8% on-year, and climbed 57.6% on-quarter to US$13.3 million. 



OCBC says the results were strong, with revenue within expectation, core earnings slightly higher than forecast. The house notes good gross profit, EBIT margins, at 77.7% (vs 72.4% in 3Q10, 78.7% in 2Q11) and 30.6% (vs 24.1% in 3Q10, 25.8% in 2Q11) respectively: “This was due largely to improving manufacturing efficiency, change in product mix and lower expenses resulting from its U.S. restructuring exercise.” 

The house adds that drug-eluting stents continue to be the key growth driver, with the segment’s sales rising 60.0% on-year, “which helped to offset a decline in sales of other interventional cardiology products.” 

OCBC keeps its Buy rating and nudges its target to $1.36 from to $1.35; “We remain sanguine about BIG’s growth prospects.”

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