- Positive on Dr Jack Wang’s CEO appointment
- Co-CEO, Mr Jeff Jump, now president of Cardiovascular Business Unit
- New property will better equip BIG to grow
- Upgrade to Buy, TP unchanged at S$1.68
Positive on abolishing Co-CEO structure.
BIG announced that Dr Jack Wang has been appointed CEO of BIG while Mr Jeffrey Jump is appointed to be the President of newly created Cardiovascular Business Unit. These corporate changes put Dr Wang solely in charge of driving global development technologically, clinically, commercially and corporately. From an organizational structure viewpoint, we see this as a positive step as the Group prepares for its next phase of growth, possibly into other new business areas. We see minimal operational impact on this change as Mr Jump will continue to oversee the DES business globally.
Better equipped to grow with new HQ, R&D.
Separately, BIG has entered into a land lease agreement with JTC at Tukang Innovation Park in Singapore, for a 30+30 years’ lease on 12k sqm of land. This site will house manufacturing, R&D to develop new high-technology, value-added medical devices and operational headquarters functions; and, construction is expected to take about three years. We view this development positively as BIG will eventually have a better platform to expand in both manufacturing capacity and product line up. Current premises located in Ubi and Kallang have a combined floor area of 7-8k sqm.
18% upside, upgrade to Buy, S$1.68 TP unchanged.
Share price has fallen by c.15% since our downgrade on 9 Feb and post its 3Q results. Current price level represents an attractive FY13F PE of 12.5x, with a robust core EPS CAGR (FY11-13F) of c.40%. TP maintained at sum-of-parts based TP of S$1.68, implying c.14x FY13F earnings. Upgrade to Buy with 18% upside
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