Following up from previous SELL CALL made on June 13, 2013. Biosensors has indeed traded lower and is currently at the 0.87 level. It has broken the critical 1.00 support level last Wednesday and has sold down even more today below 0.900. Likely support to be at 0.85 for now. Possible to stay above this support and consolidate in the coming days before finding new direction. Those holding SHORT positions can consider covering back some positions. As long as 0.900 stays as new resistance level, we are bearish still with downside to 0.80 possible if the 0.85 breaks down again. Aggressive traders can consider holding more SHORT positions on any technical rebound to profit from more downside.
Buy stop at 0.915.
OCBC – 12 Aug 2013
Biosensors International Group: A quarter to forget
Summary: Biosensors International Group (BIG) reported 1QFY14 earnings which were significantly below ours and the street’s expectations. Core PATMI plunged 57.3% YoY to US$12.1m on the back of a 11.2% decline in revenue to US$76.7m, forming 10.1% and 20.0% of our original FY14 forecasts, respectively. This was due to another lacklustre quarter of contribution from licensing and royalties revenue and an inventory drawdown in its distributor sales channels in China in anticipation of new stent tenders. Our revised FY14 revenue forecast implies a 10.4% growth and comes in below management’s ~15% growth guidance. We also see mounting cost pressures for BIG and slash our FY14 and FY15 core PATMI projections by 34.4% and 29.9%, respectively. Our FCFE-derived fair value estimate falls from S$1.60 to S$0.96. We expect some near-term selling pressure on the stock and downgrade BIG from Buy to HOLD.
Summary: Biosensors International Group (BIG) reported 1QFY14 earnings which were significantly below ours and the street’s expectations. Core PATMI plunged 57.3% YoY to US$12.1m on the back of a 11.2% decline in revenue to US$76.7m, forming 10.1% and 20.0% of our original FY14 forecasts, respectively. This was due to another lacklustre quarter of contribution from licensing and royalties revenue and an inventory drawdown in its distributor sales channels in China in anticipation of new stent tenders. Our revised FY14 revenue forecast implies a 10.4% growth and comes in below management’s ~15% growth guidance. We also see mounting cost pressures for BIG and slash our FY14 and FY15 core PATMI projections by 34.4% and 29.9%, respectively. Our FCFE-derived fair value estimate falls from S$1.60 to S$0.96. We expect some near-term selling pressure on the stock and downgrade BIG from Buy to HOLD.
DB – 7 Aug 2013
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