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Bio Sensors Report

Bio Sensors Report

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Published by Winston Wisdom Koh

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Published by: Winston Wisdom Koh on Mar 31, 2012
Copyright:Attribution Non-commercial

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01/21/2013

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Prepared by:Anna HAN Huixin
Executive Summary; Industry Analysis and Risk Assessment;Proofread Report.
Angeline HO Hwee Min
Investment thesis, Internal Analysis Qualitative Analysis;Proofread report; Compiled Presentation.
Janna KEE Jun Ling
Executive Summary; Business Model; Sustaining Growth;Concluding Words; Proofread Report.
Zita SETIAWAN
Executive Summary; Quantitative Analysis: Financial andInvestment Metrics; Proofread Report
 
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TABLE OF CONTENTS
Executive Summary ........................................................................................................................................................ 3Introduction ..................................................................................................................................................................... 4Investment Thesis ........................................................................................................................................................... 4
High Growth Potential ................................................................................................................................................... 4The First Biodegradable DES and Strong Clinical Trial Results ................................................................................... 4Access to Strategic Markets .......................................................................................................................................... 4Healthy Financial Position ............................................................................................................................................. 5
Business Model ............................................................................................................................................................... 5
Revenue Drivers and Competitive Strategy .................................................................................................................. 5Costs ............................................................................................................................................................................. 5Products ........................................................................................................................................................................ 6Business Process .......................................................................................................................................................... 6
Industry Analysis and Risk Assessments .................................................................................................................... 6
Industry Analysis ........................................................................................................................................................... 6Internal Analysis ............................................................................................................................................................ 7Risk Assessments ......................................................................................................................................................... 8
Quantitative Analysis: Financials and Investment Metrics ....................................................................................... 8
Balance Sheet Analysis and Earnings per Share Projections ...................................................................................... 8Peer Comparison .......................................................................................................................................................... 8ROE ...................................................................................................................................................................... 8Asset Turnover ..................................................................................................................................................... 9Enterprise Value to EBITDA................................................................................................................................. 9Gearing Ratio ..................................................................................................................................................... 10Current Ratio ...................................................................................................................................................... 10
Qualitative Analysis: Corporate Governance and Management Team.................................................................... 11
Good Corporate Governance ...................................................................................................................................... 11Key Management Team .............................................................................................................................................. 11
Sustaining Growth ........................................................................................................................................................ 11Concluding Words ........................................................................................................................................................ 12References ..................................................................................................................................................................... 13
 
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EXECUTIVE SUMMARY
This report is intended to portray a clear investment thesis for existing and potential investors.Biosensors International (
“Biosensors” 
or
“The Group” 
) is an emerging player in the interventional cardiology andcritical care medical devices industry, striving to develop innovative products that positively impact human lives. Thecompany was established in 1990 by Singaporean Yoh-Chie Lu, starting as a contract manufacturing company forcritical care products. It has since grown into a global company with its own in-house research and development andproducts specializing in drug-eluting stents (DES). In 2005, Biosensors was listed on the Singapore Exchange.Four reasons why investors should invest in the Group have been identified in this report. Firstly, there is high growthpotential in the DES market. Coronary artery disease (CAD) is a leading cause of death worldwide, spurring thedemand for stents
.
The global stents market is expected to grow at a CAGR of 9.5% to reach $25.2 billion by 2016.Secondly,
BioMatrix™, the Group’
s star product, is the first DES that uses biodegradable polymer, hence having afirst-mover advantage over its competitors. Thirdly, Biosensors is well positioned to access the China DES market dueto its 100% stake in JWMS as of January 2012. Biosensors has also licensed its
BioMatrix™
to Terumo Corporation,allowing the company to access the Japan market. The US is the next target market for Biosensors to enter as itrepresents 56% of the global DES market. Lastly, the Group has a healthy financial position as shown by its improvingROE. In 2011, the earnings per share grew by 45.47% as compared to the previous year
 –
it is expected to risesteadily over the years.This report also identifies risk factors in the industry relevant to Biosensors. As a small company in the medical deviceindustry, Biosensors is disadvantaged when forming preferred-supplier agreements with large hospitals that prefer tobuy all their products from one company. In the healthcare industry where there are regulations requiring completesubmissions of clinical trial and efficacy data, Biosensors has to undergo a longer time before new products can becommercialized. In addition, the declining prices of DES and competition from local manufacturers are also a risk forthe Group.In conclusion, Biosensors is highly specialized with a firm understanding of the healthcare regulatory and approvalprocesses. To shape its competitive edge, the Group has extensive research and development measures in order tostimulate innovation and ensure the quality of its products, of which DES is its current focus. In addition to its expertise
and experience, Biosensors’ addressable markets
are substantial with significant growth potential. All these contribute
to Biosensors’
historical and future growth, making the company an attractive investment.
   B   I   O   S   E   N   S   O   R   S
   I   N   V   E   S   T   O   R   R   E   L   A   T   I   O   N   S
 

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