Biosensors has broken support and 1.185 convincingly today. Has closed at 1.16 today. Has broken down head and shoulder neckline support formed at 1.185. Note that it has also been supported above 1.185 since Dec last year till today but broke down today. Cautious. More downside to 1.15 then 1.10 might be possible. Possible to accumulate short positions below 1.185 level and take profit near 1.10 support.
Buy Stop at 1.205.
Maybank KE: 13 March 2013- Biosensors Int’l: Turning More Conservative; Downgrade to Hold, TP $1.28
We cut FY3/13-15F net profit forecasts by 9-11% and reduce our TP to SGD1.28 as we turn more cautious. We thus downgrade the stock to a Hold, seeing limited upside to our revised TP.
Ø We believe that Terumo may struggle to regain market share in the next 1-2 quarters. M&A seems likely in 2013 but without any specifics, it could be tough to make a call on whether it would be positive or negative.
Ø While Biosensors looks cheap at 12.6x FY3/14F PER, we do not expect its licensing revenue with Terumo to last for forever. This is the key reason why our TP is lower than consensus. We value it separately using DCF but we have attributed a fair 18x PER multiple on its core business.
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