Biosensors' revenue to jump 17.6%

But growth is threatened by competitors.

According to OCBC, it projects Biosensors International Group (BIG) to report revenue and core EPS CAGR of 17.6% and 10.9% from FY12-14F, respectively.

Here's more from OCBC:

Growth would be underpinned by deeper market penetration, supported by robust clinical evidence which highlights the safety and efficacy of its drug-eluting stent (DES) products, in our view.

BIG has continued to deliver healthy sales growth in the EMEA and APAC regions, especially in Europe and China, which is in contrast to some of its peers.

However, Latin America and India has seen some weakness but we understand that BIG is undergoing some restructuring of its operations in Latin America such as diversifying its distributor base in a bid to increase its penetration and concentration in the region.

While challenges are apparent in the DES market (price and competitive pressures), we see positives from BIG’s superior stent technology, which has enabled the group to maintain its robust growth by capturing market share away from its competitors.

Strong volume growth has also led to economies of scale and this has been reflected in BIG’s gross margins (1HFY13: 84.3%; +3.4ppt YoY).

BIG also generated healthy free cashflows of US$52.3m for 1HFY13, thus allowing it to end the Sep quarter with a net cash position of US$331.7m.

BIG’s healthy balance sheet would enhance its ability to withstand the vagaries of the global economy, finance its R&D and clinical trials which is critical for future growth, and provide it with ample ammunition for share buybacks and M&A activities.