Biosensors International Group

Hi MW,

That I agreed. Berkshire Hathaway is a good example.

Maybe they will also use the cash for the shares buyback which is also waiting to be passed at the SGM. Hopefully it can generate the effect like we see at Olam.

Thank you for your reply.

(11-07-2012, 11:36 AM)pubster Wrote: Hi MW,

That I agreed. Berkshire Hathaway is a good example.

Maybe they will also use the cash for the shares buyback which is also waiting to be passed at the SGM. Hopefully it can generate the effect like we see at Olam.

Thank you for your reply.

It is a bad comparison.

WB is paid only $100k and his entire fortune is tied up with Berkshire.
The CEO of Bionsensors is paid more than S$1million a year with 10million share option from 36cts to 70cts all exercisable anytime.
http://biosensors.listedcompany.com/misc...010_11.pdf

(11-07-2012, 10:49 AM)yeokiwi Wrote:
From wikipedia...
Definition of 'Authorized Share Capital'
The number of stock units that a publicly traded company can issue as stated in its articles of incorporation, or as agreed upon by shareholder vote. Authorized share capital is often not fully used by management in order to leave room for future issuance of additional stock in case the company needs to raise capital quickly. Another reason to keep shares in the company treasury is to retain a controlling interest in the company.

Also be called "authorized stock," "authorized shares" or "authorized capital stock."

Read more: http://www.investopedia.com/terms/a/auth...z20HIMsFC2


Biosensors has around 1.7billion shares issued currently.
Without the shareholders' approval, Biosensors can only issue another 2.4-1.7 = 0.7billion shares more to whoever.
With the approval, Biosensors can issue 0.7 +2.4 = 3.1 billion shares.

=> Company likely to issue new shares to get more money to run its business.
In the process, the current shareholders' stake in the company will be diluted if the new shares are issued at lower than current market price(which is most likely the case).

Or maybe a right issue for every shareholder..

Or maybe issue more share with scrip dividend scheme

Or maybe issue more share with exercising of warrants

Just to add few more....

(11-07-2012, 11:51 AM)yeokiwi Wrote:

(11-07-2012, 11:36 AM)pubster Wrote: Hi MW,

That I agreed. Berkshire Hathaway is a good example.

Maybe they will also use the cash for the shares buyback which is also waiting to be passed at the SGM. Hopefully it can generate the effect like we see at Olam.

Thank you for your reply.

It is a bad comparison.

WB is paid only $100k and his entire fortune is tied up with Berkshire.
The CEO of Bionsensors is paid more than S$1million a year with 10million share option from 36cts to 70cts all exercisable anytime.
http://biosensors.listedcompany.com/misc...010_11.pdf

Yep, I saw that when I was reading through the report last night. The CEO will be sitting on a heap of paper profit when he choose to excerise his options now.

I mentioned Berkshire because MW talk about returns of cash invested exceeding the cost of capital. Nontheless, it might be still be a bad comparison but that is the only thing that comes to my mind from my very limited knowledge...

That is why I come to this forum as I hoping I can learn as much from you guys and hopefully, I can contribute back in some meaningful way.

Cheers and enjoy your lunch

the company could also be planning to do an acquisition by cash+share

Has Biosensors overpaid for its acquisition of JW Medical Systems Ltd (JWMS)?

Out of the $268M of total identifiable net assets in JWMS, only $112m are tangible assets such as PPE and Cash! $156M are intangible assets with approx. $19M attributed to patents and $135M attributed to customer relationships. Are customer relationships worth so much?!

With total consideration transferred (cash+share) being $478M for the remaining 50% of JWMS, Biosensors has paid a premium price of 3.56x Net Asset Value ($478M/$134M), and a premium price of 8.53x Net Tangible Asset Value ($478M/$56M).

Everything looks good on this one until i discover a staggering $622M goodwill and $156M intangible asset on the book, and only $44M property, plant and equipment.

"Going forward, amortisation for customer lists and patents will amount to US$4m/qtr for the next 10 years. This works out to a recurring non-cash charge of US$16m per annum." - DBS Group Research

Not sure how they count but for $622M goodwill to amortize in 10 years shouldn't it supposed to be $62M per year? This company only earn $33M for the latest quarter.

This goodwill is really freaking but most analysts still recommend this stock. Should we just close 1 eye on this, and really no big deal? I cannot imagine if the company will have to write off the goodwill it going to cost the company 2 years of revenue or 6 years of profit.

(06-09-2012, 09:02 PM)hongonn Wrote: Not sure how they count but for $622M goodwill to amortize in 10 years shouldn't it supposed to be $62M per year? This company only earn $33M for the latest quarter.

Under the current accounting rules, goodwill is NOT amortized, but tested annually for impairment. If it is deemed to be impaired, it is written down to the new value immediately. So if JWMS performs as expected the $622m of goodwill will be on the balance sheet forever. If JWMS later turns out to be a dud, there will be a big-bath writedown in that quarter.

That is a bit scary especially JWMS comes from China. I can't even find a website of its own, which is worth almost $800M?

(06-09-2012, 10:15 PM)hongonn Wrote: That is a bit scary especially JWMS comes from China. I can't even find a website of its own, which is worth almost $800M?

JWMS was a unit of Shandong Weigao (1066 HK). Weigao sold JWMS to Biosensors in exchange for shares in Biosensors.