Our six-month target price of S$0.75 for Biosensors International Group (Biosensors) is based on a forward peer- average PER of about 11x on our FY12 EPS forecast. We expect positive news flow from the company’s ongoing clinical trials, product development, and improving profitability to lift the share price over the next six-to-12 months.

In our view, Biosensors has the potential to become a global leader in the DES market with its flagship product, BioMatrix. Studies have shown that BioMatrix is comparable, if not superior, to existing products in the market. BioMatrix was awarded the CE Mark in January 2008, which gave it access to the huge market of the European Union and countries that recognise the CE Mark.

We expect the company to turn profitable in the current financial year, backed mainly by increases in sales of BioMatrix in Europe and Asia, and the continued strong performance of its joint venture in China. We forecast Biosensors to record a net profit of US$19.7m for FY10, rising to US$51.9m for FY12.