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Singapore stock market and companies daily report (Dow Jones Industrial, Biosensors International Group, Indonesian Noodle Maker) (July 28, 2010)

Contributed by Shares Investment

By Shares Investment

US Stocks End Mixed

The Dow Jones Industrial Average rose 0.1% to close at a 2-month high, pulling off its fourth-straight gain, built on solid company earnings. However, a drop in consumer confidence to a 5-month low, a sign the lack of jobs will limit US economy’s recovery, tempered investors’ enthusiasm. Consumer spending is crucial to the economic recovery as it accounts for more than two-thirds of US economic activity. The Nasdaq fell 0.4% while the S&P lost 0.1%, declining for the first time in 4 days. Meanwhile, oil settled lower at US$77.50 a barrel and gold dropped 2% a near 3-month low under US$1,160 an ounce, as weak consumer confidence data and an option expiration triggered heavy technical selling.

Biosensors’ 1Q11 Net Profit Tumbles 23%

Biosensors International Group (Biosensors) has reported net profit of US$3.24m for 1Q11, down 23% YoY, mainly due to restructuring and impairment charges relating to the planned closure of its US operations. Excluding the restructuring charges, its net profits would have been US$9.2m in the quarter. Revenue rose 39% to US$33m, driven by increased drug-eluting stent sales as well as an increase in sales of other interventional cardiology products. The increase in drug-eluting stents sales represents increased sales of the BioMatrix system in existing markets and continued expansion through regulatory approvals in new geographic areas. Overall gross margins for product revenues came to 73%, up from 69% for 1Q10, but operating expenses increased due to higher sales and marketing expenses.

Significance: The closure of Biosensors’ US operations will help reduce future operating expenses. Coupled with successful recent BioMatrix product launches, the firm is on track to achieve its expectation of a better performance this current FY.

Indonesian Noodle Maker Launches IPO

Consciencefood Holdings, an Indonesian maker of instant noodles, launched an IPO to raise $18.8m. It is selling 104m shares, representing about 26.3% of the group’s enlarged share capital, at $0.22 apiece. The offer prices the company at 5.6 times historic earnings. 2m shares are available for public subscription, while the remaining will be placed out. The group intends to use the net proceeds for promotional activity, the purchase of new machinery and manufacturing facilities and for general working capital. Efforts will be made to break into overseas market as well, particularly India and China. Last year, instant noodle accounted for 94.4% of the firm’s total revenue while snack noodle contributed the other 5.6%. Revenue increased at a 22.4% compound annual growth rate (CAGR) from 2007 to last year, to Rp489.7b. Net profit grew at CAGR of 65.5% in the same period to Rp84.7b last year.

Significance: With additional funds, the group will be able to better capitalise on the rising demand for convenient and affordable meal solutions due to increasingly busy lifestyle of Indonesian consumers and at the same time enjoy greater economies of scale.

This article is contributed by Shares Investment. Visit Sharesinv.com for the latest Singapore, Malaysia and China stock market news and reports.