Concerns over price cuts for Biosensors’ drug-eluting stents in China and Japan are overdone, says Maybank-KE; “while the concern is real, we believe that Biosensors has been overly-penalised.

Trading at 12x (fiscal) FY13F PER, we think that the negatives have been priced-in and valuations are looking cheap.” It adds, volume growth could mitigate price decline, noting a TechNavio industry report said China’s DES market’s 2011-15 CAGR is expected to be 25.5%, amid rising incidence of cardiovascular diseases.

Once the flagship BioMatrix Flex DES is approved for sale in China, Biosensors would have an edge over foreign competitors on a strong distribution channel, it says. Biosensors is also aiming to transform into a multi-product medical-equipment company and it expects to see some corporate actions toward the goal, it says.

It cuts target to $1.42 from $1.61 after lowering fiscal-FY13 earnings forecast by about 13% on expectations of higher operating expenses to support revenue growth and product development. It keeps a Buy call. The stock is up 0.8% at $1.24.