add liquid could be the new solid · liquid biopsies to test for the presence of circulating tumour...

Company Note | Alpha series Medical Equipment & Svs │ Singapore │ March 26, 2019

IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. IF THIS REPORT IS DISTRIBUTED IN THE UNITED STATES IT IS DISTRIBUTED BY CGS-CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH.

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INITIATION

Biolidics Ltd

Liquid could be the new solid

■ We initiate on liquid biopsy diagnostic firm Biolidics with Add and TP of S$0.32, based on 12x FY20F EV/Sales (below global peer average of 16.8x).

■ The company’s unique technology platform and strategic partnerships makes it a potential key beneficiary of the growing liquid biopsy industry.

■ We expect Biolidics’ net losses to narrow significantly in FY19-20F, with revenue CAGR of 78% in FY19-21F and better cost management.

Single-product company backed by disruptive patented technology Established in 2009, Biolidics is a newly-listed medical technology company spun off from

the NUS and SMART research centre. Having developed a fully-automated in vitro

diagnostic (IVD) medical device (ClearCell® FX1 System) and the CTChip

® FR1 biochip,

it now sells this platform to hospitals, labs and academic/research institutions to perform

liquid biopsies to test for the presence of circulating tumour cells (CTCs). This technology

enables the separation and enrichment of cancer cells from 7.5ml of blood under 2 hours

(vs. 7-30 days turnaround time for Guardant Health’s programmes).

Potential beneficiary of liquid biopsies gaining traction Liquid biopsy offers several advantages over tissue biopsy in cancer diagnostics, such as

greater availability, quality and amount of tissue samples. We believe increasing

insurance inclusion, more government initiatives and funding could spur medical

advances and broaden its market adoption, thus benefiting biotech firms like Biolidics.

Expansion in applications beyond therapy selection and treatment monitoring also

presents a bigger global liquid biopsy market of US$6.5bn by 2026F, according to the

Analytical Research Cognizance 2019 report. Amid the recent M&A flurry in this sector,

we think Biolidics makes an attractive target, given its novel technology and track record.

Sysmex partnership & foray into China point to earnings inflection To date, Biolidics has installed more than 80 systems globally and conducted over 170

tests. We expect the group to post substantially lower net losses of S$2.9m in FY19F and

S$1.3m in FY20F, led by robust sales growth and better cost efficiency. Its collaboration

with Sysmex Corporation (6869 JP, Not Rated, a global hematology leader), Hunan Agen

Medicine Laboratory Technology (Unlisted) and Hangzhou Normal University (Unlisted)

could promote more laboratory-developed tests (LDTs), underpinning FY18-21F revenue

CAGR of 78%. The group has net cash of S$11.5m as at end Dec-2018.

Initiate with Add and project topline CAGR of 78% in FY18-21F We think Biolidics is well-positioned to reap the benefits of growth in the liquid biopsy

market. We initiate coverage with an Add rating and target price of S$0.32, pegged to

12.0x FY20F EV/Sales (30% below the global industry average of 16.8x). Potential

catalysts: faster uptake of LDTs and further strategic partnerships/M&A. Unexpected

project delays or unfavorable regulatory changes pose downside risks to our Add call.

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS

Singapore

ADD

Consensus ratings*: Buy 0 Hold 0 Sell 0

Current price: S$0.27

Target price: S$0.32

Previous target: N/A

Up/downside: 19.0%

CIMB / Consensus: na

Reuters: BIOL.SI

Bloomberg: BLD SP

Market cap: US$47.61m

S$64.26m

Average daily turnover: US$0.04m

S$0.05m

Current shares o/s: 242.5m

Free float: 60.6% *Source: Bloomberg

Key changes in this note

Not applicable

Source: Bloomberg

Price performance 1M 3M 12M

Absolute (%) -3.6 32.5

Relative (%) -0.9 28

Major shareholders % held Clearbridge Bsa Pte 24.8

Seeds Capital Pte Ltd 10.7

Trauwin Pte Limited 7.9

Insert

Analyst(s)

NGOH Yi Sin

T (65) 6210 8604 E [email protected]

Financial Summary Dec-17A Dec-18A Dec-19F Dec-20F Dec-21F

Revenue (S$th) 2,084 1,268 2,495 5,728 7,119

Operating EBITDA (S$th) (3,734) (4,972) (2,602) (1,000) 1,645

Net Profit (S$th) (7,212) (6,251) (2,926) (1,327) 1,091

Normalised EPS (S$) (0.11) (0.05) (0.01) (0.01) 0.00

Normalised EPS Growth (4.2%) (56.4%) (74.4%) (54.6%)

FD Normalised P/E (x) NA NA NA NA 58.90

DPS (S$) - - - - -

Dividend Yield 0% 0% 0% 0% 0%

EV/EBITDA (x) NA NA NA NA 34.60

P/FCFE (x) 254.4 NA NA NA NA

Net Gearing (65.4%) (91.6%) (86.9%) (90.7%) (78.3%)

P/BV (x) NA 5.12 6.67 7.74 6.84

ROE 27% 105% (26%) (15%) 12%

% Change In Normalised EPS Estimates

Normalised EPS/consensus EPS (x)

67.0

81.1

95.1

109.2

0.180

0.230

0.280

0.330

Price Close Relative to FSSTI (RHS)

2

4

6

Dec-18 Jan-19 Feb-19 Mar-19

Vo

l m

Medical Equipment & Svs │ Singapore

Biolidics Ltd │ March 26, 2019

2

Liquid could be the new solid

BUSINESS OVERVIEW

Established in 2009 and listed on the Singapore Exchange in Dec 2018,

Biolidics Limited (formerly known as Clearbridge Biomedics Pte Ltd) is a

Singapore-based medical technology company that is focused on the

development of cell enrichment systems that, when combined with other

analytical tests, provide a wide range of applications for cancer diagnosis,

prognosis, treatment selection and treatment monitoring. The company is a spin-

off from the National University of Singapore (NUS) and Singapore-MIT Alliance for Research and Technology (SMART) research centre.

Through investment of c.S$30m over a 10-year period, Biolidics has developed

a fully-automated in vitro diagnostic (IVD) medical device, known as the

“ClearCell® FX1 System” and its accompanying CTChip

® FR1 biochip, which

utilises novel, patented technology to separate and enrich cancer cells from

blood (7.5ml of blood under two hours). This enables users of the system to

perform liquid biopsies to test for the presence of cancer cells, specifically

circulating tumour cells (CTCs, defined as cancer cells that detach from a

primary tumour), in blood samples and to carry out further analysis (Figures 1-2).

As at 15 Nov 2018, the group owns a patent portfolio of 12 issued patents and

22 patent-pending applications relating to its ClearCell® FX1 System” and

CTChip® FR1 biochip.

Figure 1: Biolidics’ ClearCell® FX1 System and CTChip® FRI

biochip

Figure 2: Patented technology to detect cancer cells using blood

samples

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS

To date, Biolidics has deployed more than 80 of its systems globally and carried

out more than 170 tests in Singapore to detect breast, prostate and lung cancer.

Backed by a single product which has a specificity rate of 95% (according to

management), Biolidics’ business model revolves around three main revenue pillars:

1) Sales of ClearCell® FX1 System;

2) Sales of the accompanying CTChip® FR1 biochips and other

consumables. Each biochip can only be used once for a liquid biopsy test; and

3) Development of a wide range of clinical or laboratory-developed tests

(LDTs), which will in turn promote higher usage of ClearCell® FX1

System.



3

Figure 3: Product milestones for Biolidics


Customers

As at 15 Nov 2018, more than 80 ClearCell® FX1 Systems have been installed

worldwide, in countries like Singapore, China, Hong Kong, Japan, the US and

certain EU countries. While its key product was only commercialised in 2015,

Biolidics continues to expand its customer pool (comprising academic and

research institutions, hospitals and laboratories), with its major customers

accounting for about 91.7%, 96.0% and 81.1% of FY15, FY16 and FY17 revenue, respectively (Figure 6).

Figure 4: Biolidics’ quality assurance has been recognised by international bodies

(including ISO 13485 certification)




4

Figure 5: North Asia (China, HK, Japan) consistently ranks as

Biolidics’ most important market

Figure 6: Biolidics' list of key customers

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS

Strategic shareholders

Apart from Clearbridge Health (CBH SP, Not Rated) which owns a 35.5%

indirect stake in the company, Biolidics’ key shareholders include SEEDS

Capital (Unlisted, indirectly wholly-owned by Enterprise Singapore, a statutory

board under the Ministry of Trade and Industry Singapore) and Professor Xie

Tian, who is currently the Dean of the Department of Medical Oncology, Holistic

Integrative Oncology Institutes and Holistic Integrative Cancer Center of Traditional Chinese and Western Medicine in Hangzhou Normal University.

Prior to its listing, the group had completed a few rounds of financing (Series A,

B, B2 and C), raising total proceeds of S$34.3m from investors like Mitsubishi

UFJ Life Science (Unlisted), Naga Capital Partners (Unlisted) and BV Healthcare II (life science fund managed by BioVeda Capital, Unlisted).

Superior results vs traditional diagnostic methods

Cancer is not easy to diagnose and manage, given its heterogeneity at the

morphological, genetic and clinical levels. The current practice of diagnosing

involves a tissue biopsy, or the surgical removal of tissue from a patient’s body,

and the tissue sample is subsequently sent to a laboratory for examination.

Special staining methods may also be employed to detect the amounts of certain

proteins present in the tumour cells. A diagnostic report is then generated to

determine if the cancer is invasive, its grade (how the cancer cells look

compared with healthy cells) and mitotic rate (how quickly the cells are dividing), as well as the diagnosis.

However, certain limitations exist that may inhibit the ease and usefulness

of obtaining and analysing these tissue samples. For instance, the

availability of tissue sample, quality and amount of tissue obtained. Tissue

biopsy is an invasive procedure that is not typically performed on a recurring

basis, hence restricting its usefulness for routine periodic patient monitoring and

the possible personalisation of treatments. While liquid biopsies are increasingly

favoured as simple and minimally-invasive alternatives to tissue biopsies, they

have not taken off fully in cancer monitoring and management, due to the

difficulty of isolating CTCs from other components of blood, plus the extremely

rare occurrence of CTCs in blood (on average, only one CTC can be found in every billion blood cells).

Unlike other methods for liquid biopsies currently available in the market,

Biolidics’ CTChip® FR1 biochip uses a label-free approach to enrich circulating

tumour cells (“CTCs”), to preserve them in their original state and viability for use

in diagnostic tests. As a result, this takes away the need for a single biomarker

Title:

Source:

Please fill in the values above to have them entered in your report

-

200

400

600

800

1,000

1,200

1,400

FY15 FY16 FY17 FY18

Singapore Japan China Europe US HK Others

Product sales by geography (S$'000)

Major customers (% of sales) FY15 FY16 FY17 1H18

Sysmex 0.2 55.7 48.5 33.5

Scrum Inc. 21.1 2.7 6.0 4.9

Prometheus Biomedics Co. Ltd 7.5 0.0 0.0 0.0

MGI Wuhan 0.0 10.7 12.2 0.0

Yikon Genomics 0.0 8.5 0.6 0.0

Oncoseek Limited 21.8 0.3 0.3 1.6

The University of Hong Kong 12.6 2.1 8.4 1.7

University of Zurich 12.2 1.0 4.3 0.0

Changzhou Flon Biotech Co., Ltd 7.1 1.9 0.6 0.0

University of Manchester 8.3 0.7 0.2 0.0

Cellthera Pharm LLC 0.0 6.6 0.0 0.0

The Jackson Laboratory 0.9 5.8 0.0 0.0

Trinity College Dublin 0.0 0.0 0.0 14.5

Axon Lab AG 0.0 0.0 0.0 15.9

Alamed LLC 0.0 0.0 0.0 9.0



5

and enables the isolation of CTCs across a heterogeneous population without bias.

Competition

There are other companies that conduct research to develop and offer products

and services for liquid biopsy in the oncology sector globally. These comprise

systems that focus on the isolation of CTCs; and circulating tumour

deoxyribonucleic acid (ctDNA), which is tumour-derived fragmented DNA in the

bloodstream; as well as microRNA (miRNA) which are small, non-coding

ribonucleic acid (RNA) that regulate gene expression. By biomarker type, the

CTC segment dominates the global liquid biopsy market, accounting for close to

56% of the overall revenue share in 2018, according to the Market Research Future report issued in December 2018.

Over 2017-18, Biolidics (Figures 10-11) was identified by Galen Growth Asia

and the Asian Scientist as one of the top 10 liquid biopsy start-ups in Asia and

hottest biotech start-ups in Singapore, respectively. Below is a list of products by other companies that are similar to Biolidics’ products:

Similar products that focus on isolating CTCs via a microfluidic

separation method are ANGLE PLC’s (AGL LN, Not Rated) Parsotix system and Celsee Diagnostics Inc’s (Unlisted) PREP system;

Products that focus on isolating CTCs using other separation

techniques include the CellCollector system by GILUPI GmbH (Unlisted)

and the DEPArray system offered by Menarini Silicon Biosystems Spa (Unlisted); and

Products that focus on the isolation of circulating tumour DNA

comprise OncoDNA SA’s (Unlisted) OncoTRACE and OncoDEEP, as

well as Guardant360 offered by Guardant Health Inc (GH US, Not Rated).

Figure 7: Liquid biopsy applications in oncology




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Figure 8: Overview of liquid biopsy techniques

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS, L.E.K. ANALYSIS (JAN 2018)

Figure 9: Currently, more than 100 companies worldwide have developed or commercialised liquid biopsy products for various

clinical applications; ~80% are send-out tests, while only ~20% of offerings focus on early detection and diagnosis.

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS, DECIBIO CONSULTING



7

Figure 10: Top 10 liquid biopsy start-ups in Asia (as at end-Dec

2018)

Figure 11: Ten of Singapore's hottest biotech start-ups (2017)

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS, GALEN GROWTH ASIA (2018) SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS, ASIAN SCIENTIST

ctDNA profiling miRNA profiling

HaploX (China) Nova Satra Dx (Singapore)

Asia Genomics (Singapore) Mirxes (Singapore)

Theranosis Life Sciences (India) Lucence Diagnostics (Singapore)

Anchor Dx (China)

Annoroad (China)

CTC profiling

BGI Genomics (China)

Asia Genomics (Singapore)

Clearbridge BioMedics (Singapore), now known as Biolidics

1 ASLAN Pharmaceuticals

2 AYOXXA Biosystems

3 Clearbridge Biomedics

4 HistoIndex

5 Invitrocue

6 Lion TCR

7 Lucence Diagnostics

8 MerLion Pharmaceuticals

9 MiRXES

10 Tessa Therapeutics



8

INDUSTRY OUTLOOK

Cancer is still the second-biggest cause of death globally

Survival rates for cancer may have improved significantly in recent years, but it remains the second-biggest cause of death globally, responsible for c.9.6m deaths in 2018 according to the World Health Organization (WHO). Driven by the rising ageing population, dietary risks and changing lifestyles (smoking, increased consumption of fat, red meat and alcohol), the likelihood of cancer deaths may rise by 45.0% to 163 cases per 100,000 people by 2030F, from about 112 in 2005 (source: Acumen Research and Consulting). Acumen Research and Consulting believes the rise in the prevalence of cancer will activate demand for more screening tests and imaging modalities, underpinning its projection of the global market for cancer diagnostics expanding by 2018-26F CAGR of 7.2% to reach an estimated value of US$250.3bn by 2026F. Studies have shown that the early detection of cancer improves the chances of successful treatment. Based on statistics from Cancer Research UK, more than 80% of lung cancer patients will survive for at least a year if diagnosed at the earliest stage, compared to around 15% for people diagnosed at the most advanced stage of disease. Similarly, over 90% of women diagnosed with breast cancer at the earliest stage survive the disease for at least five years, vs. 15% for women diagnosed at the most advanced stage.

Rising awareness and adoption of liquid biopsies

Liquid biopsy techniques have started to gain traction worldwide in recent years, thanks to their rising role in facilitating precision medicine and targeted therapies. The first regulatory approval by the US Food and Drug Administration (FDA) in Jun 2016 for the use of liquid biopsy blood test to treat cancer, as well as inclusion in insurance health plans, have also made such tests more accessible and affordable. Premera Blue Cross (Unlisted), Priority Health (Unlisted) and BUPA Global Insurance (Unlisted) are some of the few global health plans and insurers that provide reimbursement for liquid biopsies like Guardant360 and OncoSTRAT&GO. Based on DeciBio Consulting (life science market research expert) research findings, liquid biopsies are currently used in c.5% of cancer patients, primarily led by clinical trials. Further research and publications will help to build up physician and general acceptance of such diagnostic methods, thus increasing the test volumes by up to 5x over the next three years, particularly in the US (source: DeciBio Consulting). Lab-developed tests (LDTs) could continue to dominate in the liquid biopsy space, due to high price sensitivity especially in the EU and nationalised healthcare systems. Meanwhile, there are major industry players pushing for FDA approval amid reimbursement uncertainty, which could offer them a competitive edge. For example, Roche (ROG SW, Not Rated) and AmoyDx [owned by Amoy Diagnostics (300685 CH, Not Rated)] have obtained FDA and National Medical Products Administration (NMPA) (China) approval, respectively, for polymerase chain reaction (PCR) based epidermal growth factor receptor gene (EGFR) assays, and Guardant’s 360 assay has received expedited access pathway designation from the FDA.

Current applications of liquid biopsy are just scratching the surface of its market potential

Three major markets exist for liquid biopsy applications – early cancer risk detection, late stage cancer (treatment monitoring and therapy selection) and cancer recurrence detection. The global liquid biopsy market is expected to reach US$6.5bn by 2026F, according to the Analytical Research Cognizance 2019 report, with the therapy selection segment currently accounting for the largest share of the market.



9

DeciBio Consulting believes therapy selection and monitoring will remain the key applications of liquid biopsy in the near term, while early detection/screening will require more time for broader clinical adoption, given the challenges associated with current technologies, biological variances and need for demonstrated clinical utility or cost-benefit for payors. As liquid biopsy techniques become more sophisticated, their usage could expand beyond recurrence monitoring and early screening for oncology, to applications in other areas such as pre-natal testing and transplant care.

Figure 12: Liquid biopsy applications, with their pros, cons and market potential

Note: Scale of opportunity in US$

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS, L.E.K. ANALYSIS (JAN 2018)

Figure 13: Level of ctDNA in blood across the stages of cancer

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS, PHARMA INTELLIGENCE

Increased funding and M&As to accelerate overall sector development

Precision medicine has been a buzzword in recent years, spurred by several initiatives and funding from both the public and private sectors that could support



10

rapid advancements in this area. The US introduced its Precision Medicine initiative in 2015 accompanied by a US$216m federal budget in 2016, to collect and analyse big data in order to create safer and more effective treatments. The Chinese government identified genomics as a key strategic field in its 14th Five-Year Plan (2016-20) for the country’s economic and social development. In 2016, the Chinese Academy of Sciences inaugurated the Precision Medicine Initiative, a 15-year, US$9.2bn programme to sequence over 100m human genomes by 2030. Supportive government policies and financing have spurred the business of genomics in China beyond a single company in 1999 to more than 15 companies today, with BGI Genomics (300676 CH, Not Rated), Annoroad Gene Technology (Unlisted) and WuXi NextCODE Genomics (Unlisted) as the biggest players in the country. In Singapore, the National Heart Centre (NHCS) has chosen WuXi NextCODE as its technology partner in advancing population-based genomic research and precision medicine applications. WuXi NextCODE will help develop a cloud-based enterprise data warehouse that integrates large-scale whole genome sequence, medical and wearables data from both cardiovascular patients and healthy control subjects. Private equity firms and standalone corporations have also been active investors in the liquid biopsy field. For instance, Natera (NTRA US, Not Rated) and BGI Genomics signed a US$50m partnership agreement to commercialise Natera’s circulating tumour DNA Signatera minimal residual disease (MRD) test in China and develop reproductive health tests. Grail Inc (Unlisted), a spin-out from Illumina (ILMN US, Not Rated) that raised proceeds of US$1.6bn from three rounds of financing involving a total of 17 investors, merged with Hong-Kong based cancer-testing company Cirina (Unlisted) in 2017.

Figure 14: Mergers & acquisitions of US$50m-100m size in 2018

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS, CAPITAL IQ

Acquirer Target Date

Transaction

value

(US$m)

Implied

EVRevenue EBIT EBITDA

Target

sector

Francisco Partners

Management LLC

Connecture,

IncJan-18 113 108 1.41x nm nm

Health care

technology

Allscripts Healthcare,

LLCHealthGrid May-18 110 110 nm nm nm Healthcare

Astellas Pharma Inc.Quethera

LimitedAug-18 109 109 nm nm nm Healthcare

Blackstone Medical, Inc.Spinal

Kinetics, Inc.Mar-18 105 105 nm nm nm Healthcare

Agilent Technologies,

Inc.LaserGen, Inc. Mar-18 105 202 nm nm nm Healthcare

Astellas Pharma Inc.Universal Cells

Inc.Feb-18 103 103 nm nm nm Healthcare

bioMerieux S.A.Astute

Medical, Inc.Apr-18 90 90 nm nm nm Healthcare

AngioDynamics, Inc.RadiaDyne,

L.L.CSep-18 90 90 15.00x nm nm Healthcare

Aurora Cannabis Inc.

Anandia

Laboratories

Inc.

Jun-18 87 87 nm nm nm Healthcare

Hologic, Inc.Faxitron

Bioptics, LLCJul-18 85 85 3.15x nm nm Healthcare

Shanghai Xianfeng

Investment Management

Co., Ltd

elliquence, LLC Jun-18 77 77 4.83x nm nm Healthcare

Magnum Capital

Industrial PartnersINDIBA, S.A. Jan-18 72 72 3.00x nm 8.6x Healthcare

Harvard Bioscience, Inc.

Data Sciences

International,

Inc.

Jan-18 70 70 1.59x nm nm Healthcare

Halyard Health, Inc.

(nka: Avanos Medical,

CoolSystems,

Inc.Jun-18 65 65 1.86x nm nm Healthcare

UFP Technologies, Inc. Dielectrics, Inc. Feb-18 60 57 1.33x nm nm Healthcare

Tecan Group Ltd

NuGEN

Technologies,

Inc.

Aug-18 55 55 3.78x nm nm Healthcare

Implied EV



11

COMPANY OUTLOOK

Foray into China’s liquid biopsy market

Following its collaboration with the National Cancer Centre of Singapore, and

BGI Genomics (a China-based genomics company) to co-develop a liquid

biopsy system in 2014, Biolidics has extended its network of partners to Hunan

Agen Medicine Laboratory Technology Co Ltd and Holistic Integrative Pharmacy

Institute, Hangzhou Normal University, providing them with the ClearCell® FX1

System and CTChip® FR1 biochips for the development of CTC diagnostic

services.

As the group approaches the validation baseline in the Hunan lab (to collect a

minimum number of 180 samples), we expect Biolidics to start charging for each

lab developed test (LDT) carried out in 2H19F. Each LDT using Biolidics’

ClearCell® FX1 System is reasonably priced at S$170-200 (Rmb850-1,000) on

average vs. the typical cost of S$700 (Rmb3,500) for other cancer diagnostic

tests. This should translate into better acceptance by existing and potential

users, in our view. We understand from management that Hunan Agen Medicine

Laboratory Technology Co Ltd currently serves two reputable hospitals in the

Hunan region that had a population of 68.6m as at 2017 - Xiangya Hospital Central South University and Hunan Cancer Hospital.

As its platform continues to gain traction globally, we believe Biolidics will

embark on similar tie-ups with other labs, academic institutions and multinational

companies to drive sales of its proprietary system and biochips, before selling directly to hospitals and clinics.

Collaboration with Sysmex Corporation

In Feb 2019, Biolidics announced the potential collaboration with Sysmex

Corporation (6869 JP, Not Rated), the global leader in hematology, hemostasis

and urinalysis, based on total instrument sales in 2018 (source: Sysmex). Not

only will Biolidics jointly develop with Sysmex’s laboratory assays in the field of

circulating tumour cells utilising the ClearCell® FX1 System and Sysmex’s

molecular imaging flow cytometer MI-FCM, both parties will also promote

laboratory assay developments, applications and market developments for the

potential commercialisation of laboratory assays. Potential downstream

applications that could be developed using Biolidics’ technology comprise: i)

genetic analysis, ii) in vitro or in vivo tumour models, iii) immunofluorescence, and iv) fluorescent in situ hybridisation (FISH).

We believe Biolidics will benefit from this through greater sales of ClearCell®

FX1 System as it enlarges the installed base in Sysmex’s Riken Genesis labs (currently two locations in Japan), and CTChip

® FR1 biochips.

Figure 15: Expanding applications of liquid biopsy for Sysmex Figure 16: Biolidics’ cell separation unit has been featured as

part of Sysmex’s cell measurement platform

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS, SYSMEX SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS, SYSMEX



12

SWOT analysis

Figure 17: SWOT analysis


Strengths Weaknesses

Research-backed and technologically-proven

platform for enrichment of CTCs

Single product limited to in-vitro diagnostic

purposes

Strong partnerships with leading academic and

research institutions, laboratories and diagnostics

manufacturers

Lack of long-term funding

Commercialised product with growing installed

base and distributorship

Opportunities Threats

Rising awareness and adoption of liquid biopsies

to drive market potentialIncreasingly crowded landscape for liquid biopsy

Expanding applications and product pipelineRegulatory uncertainty and technological

changes

Foray into China's liquid biopsy market



13

FINANCIALS

Revenue to double per annum over FY19-20F

Biolidics currently sells its ClearCell® FX1 System at an average list price of

S$100k (depending on each market), and in certain cases, loans its machines to institutes for them to carry out further analysis and development. Given the new partnerships and distribution agreements it has entered into, we expect improvement in Biolidics’ pricing power and sales volumes of ClearCell

® FX1

System (historically 10 machines were sold per annum, on average, in FY15-18). As the group reaches an earnings inflection point (validating a minimum number of clinical trials in China) and its IVD medical device becomes more widely adopted, we think sales of its CTChip

® FR1 biochips should grow exponentially,

in tandem with the number of tests carried out.

We forecast Biolidics to recognise S$0.3m-1.2m of project-related revenue p.a. in FY19-21F, arising from the development work it is engaged in with Sysmex. All these underpin our robust revenue CAGR projection of 78% over FY18-21F for the group.

Figure 18: We forecast revenue to increase by 78% CAGR from FY18-21F


We expect reported net loss to halve in FY19-20F

Apart from annual sales growth of 24-130% over FY19-21F, we think Biolidics’

bottomline would improve due to cost savings from two main areas: i) absence

of financing costs and fair value (FV) changes for financial liabilities because all

of its convertible loans and redeemable convertible preference shares have

been fully exercised; and ii) reduction in other expenses (no more listing and

professional fees). This will, however, be offset by marginally-higher staff expenses as they increase headcount in China for sales reps and scientists.

We project research and development (R&D) expenses to be stable at S$1.0m-

1.2m per annum, as the group focuses on: i) developing clinical applications for

its ClearCell® FX1 System, and ii) expanding product pipeline through the

development of next-generation systems and tests. There is potential for gross

margin expansion from cheaper outsourcing of production for its systems and

chips, which we have yet to include in our FY19-20F forecasts. Overall, we still

expect Biolidics to incur net losses over the next two years before recording net

profit of S$1.1m in FY21F, but these losses should narrow significantly from S$6.3m in FY18 to S$2.9m in FY19F and S$1.3m in FY20F (Figure 19).

Title:

Source:

Please fill in the values above to have them entered in your report141.7%

7.3%

-39.1%

96.8%

129.6%

24.3%

-100.0%

-50.0%

0.0%

50.0%

100.0%

150.0%

200.0%

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

FY15 FY16 FY17 FY18 FY19F FY20F FY21F

Product sales Project yoy chng (%)

Sales (S$'000)



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Figure 19: We expect Biolidics’ reported net losses to narrow significantly in FY19-

20F, before it achieves net profit in FY21F


Healthy net cash position

With the conversion of convertible loans/redeemable convertible preference

shares to equity and IPO net proceeds of S$6.1m, Biolidics has net cash of

S$11.5m as at end-2018. We think this is sufficient for its near-term working

capital needs, with some headroom for potential synergistic M&As. Our FY19-

21F earnings forecasts assume capex of S0.3m p.a. and capitalisation of

development costs as intangible assets of S$0.1m p.a., mainly for purchases of equipment and to facilitate R&D work.

Title:

Source:

Please fill in the values above to have them entered in your report

(8,028)

(6,866)(7,212)

(6,251)

(2,926)

(1,327)

1,091

(4,746)(4,191) (4,237) (3,943)

(2,926)

(1,327)

1,091

(10,000)

(8,000)

(6,000)

(4,000)

(2,000)

-

2,000

FY15 FY16 FY17 FY18 FY19F FY20F FY21F

Reported net profit Core net profit

Net profit (S$'000)



15

VALUATION AND RECOMMENDATION

Initiate coverage with Add and a target price of S$0.32

Backed by its strong R&D capability and patented technology, we like Biolidics

for its unique exposure to the growing global liquid biopsy market, thanks to

technological advancements and increasing adoption. Its strategic partnerships

with Sysmex, Hunan Agen Medicine Laboratory Technology Co. Ltd and Holistic

Integrative Pharmacy Institute will enable it to leverage on their distribution

network and expertise, for potential earnings turnaround in FY20F. Hence, we

initiate coverage of the stock with an Add rating and target price of S$0.32,

pegged to 12x FY20F EV/sales, which is at a 30% discount to global peers’ average of 16.8x.

We also think Biolidics could make an attractive target for large pharmaceutical

or life sciences companies. The group could also explore alternative listings in

other markets (such as Nasdaq) to raise its profile and valuations, which could

be a catalyst for the stock, in our view. Other re-rating catalysts include faster-

than-expected take-up of its platform and further strategic partnerships.

Downside risks to our Add call could come from unexpected project delays or regulatory changes.

Figure 20: Global peers comparison

Note: Not Rated (NR) companies forecasts based on Bloomberg consensus estimates

SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS, BLOOMBERG (AS AT 22 MAR 2019)

Bloomberg Price Target

Price

Market

CapP/E (x)

3-year

EPSP/BV (x)

Recurring ROE

(%)EV/EBITDA (x) EV/Sales (x)

Company Ticker Recom. (lcl curr) (lcl curr) (US$ m) CY19F CY20F

CAGR

(%) CY19F CY20F CY19F CY20F CY19F CY20F CY19F CY20F

Biolidics Ltd BLD SP ADD 0.27 0.32 48 na na na 6.7 7.7 -26.2% -14.8% na na 22.4 9.9

Precipio Inc PRPO US Not rated 0.16 na 7 na na na na na na na na na na na

Biocept Inc BIOC US Not rated 1.05 na 20 na na na na na na na na na na na

Trovagene Inc TROV US Not rated 4.04 na 16 na na -29.6% na na na na na na 8.4 5.0

MDxHealth MXDHF US Not rated 1.77 na 106 na na na 3.8 10.8 na na na na 2.9 2.4

Angle PLC AGL LN Not rated 52.50 na 99 na na -41.2% na na -68.6% -109.1% na na 26.7 11.6

Oncocyte Corp OCX US Not rated 3.63 na 187 na na na 7.7 30.3 -65.4% -310.1% na na 1769.6 79.2

NanoString Technologies Inc NSTG US Not rated 24.23 na 810 na na -17.7% 17.1 28.8 -850.9% -275.8% na na 6.4 5.8

Bio-Techne Corp TECH US Not rated 200.4 na 7,570 41.7 37.4 -10.2% 6.7 6.0 14.2% 15.1% 28.8 25.1 10.6 9.5

Genomic Health Inc GHDX US Not rated 74.63 na 2,754 51.1 44.1 40.3% 8.4 6.8 15.7% 14.5% 35.9 28.3 5.7 5.2

BGI Genomics Co Ltd 300676 CH Not rated 76.36 na 4,557 55.3 42.7 na na na 11.0% 12.9% na na 8.6 6.6

Natera Inc NTRA US Not rated 20.49 na 1,287 na na -24.0% 100.9 34.6 265.3% 4.9% na na 4.4 3.7

Guardant Health Inc GH US Not rated 85.07 na 7,310 na na -36.9% 18.5 24.3 -28.0% -25.9% na na 57.7 39.2

Simple average 49.4 41.4 -17.0% 23.3 20.2 -88.3% -84.2% 32.3 26.7 190.1 16.8



16

KEY RISKS

Technological obsolescence. Biolidics operates in a competitive and fast-

growing industry, with rapid development and introduction of new technologies

and tests, thereby rendering product life cycles difficult to estimate. If the group

is unable to develop, acquire or obtain distribution rights for new and improved

technologies on favourable terms as compared to its bigger competitors with longer operating histories, its overall profitability could be affected.

Reliance on two third-party manufacturers. Biolidics currently depends on

two third-party manufacturers to assemble its products (ClearCell®

FX1 System

and CTChip® FR1 biochip), which accounted for 73-88% of its cost of sales over

FY15-17. These critical components are complex and undergo assembly

processes that are subject to strict specifications, while availability of suppliers is

limited. Any disruption to the workflow process or supply of necessary materials

could cause significant delays in product development and cause Biolidics to incur substantial losses.

Subject to legal and regulatory requirements. Biolidics’ products and

business activities are regulated by various laws and regulations governing

medical devices in the countries in which the group markets and sells its

products, including licensing and certification requirements, product registration

requirements, quality and safety standards, as well as periodic renewal and

reassessment procedures. The process of obtaining regulatory approvals can be

costly and time-consuming; any revocation of licence, healthcare reform or

product recall could increase Biolidics’ compliance burden and have a material negative impact on its operations.

Inadequate protection of patents and intellectual property rights. Biolidics’

patents (covering the technologies and processes involved in the ClearCell® FX1

System and CTChip® FR1 biochip) and proprietary technology may not be

sufficient to protect its intellectual property rights, which are critical to its

business. Moreover, its patents will expire at some point, while pending patent

applications may not necessarily result in issued patents, possibly leading to claims and challenges by its competitors.

Reliant on relationships with strategic partners. Due to the limited availability

of research resources, the group collaborates with strategic partners such as

academic and research institutions to fund, network, develop, commercialise

and market its products. For instance, Biolidics has entered into non-exclusive

collaboration agreements with Sysmex Corporation, the National Cancer Centre

of Singapore and Hospices Civils de Lyon (Unlisted). These partnerships are

generally non-exclusive in nature; any failure to enter into or the termination of

these relationships could restrict Biolidics’ earnings growth and adversely affect its business.

Difficulty in gaining commercial acceptance. While Biolidics currently derives

most of its revenue from the sale of ClearCell® FX1 System and CTChip

® FR1

biochip, which were launched commercially in 2015, the company has other

offerings (e.g. diagnostic tests for CTC analysis) that are in varying stages of

R&D. Commercial acceptance of these products and/or services will depend on

a number of factors, including successful clinical validation, market acceptance

among physicians and patients, as well as the extent to which they are approved

for inclusion on the diagnostic test menus of hospitals and managed care organisations.

Completion of clinical validation of its products and/or services also hinge upon

compliance with government or regulatory requirements, availability of suitable



17

patients that meet the protocol’s inclusion criteria and securing sufficient funding to carry out further analysis and R&D work.

APPENDIX

Management team

Figure 21: Key management team




18

BY THE NUMBERS


-760%

-135%

490%

1,115%

1,740%

2,365%

2,990%

3,615%

4,240%

4.10

4.30

4.50

4.70

4.90

5.10

5.30

5.50

5.70

Jan-15A Jan-16A Jan-17A Jan-18A Jan-19F Jan-20F

P/BV vs ROE

Rolling P/BV (x) (lhs) ROE (rhs)

-70.0%

-60.0%

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

Jan-15A Jan-16A Jan-17A Jan-18A Jan-19F Jan-20F

12-mth Fwd FD Normalised P/E vs FD Normalised EPS Growth

12-mth Fwd Rolling FD Normalised P/E (x)

Diluted Normalised EPS Growth

Profit & Loss

(S$th) Dec-17A Dec-18A Dec-19F Dec-20F Dec-21F

Total Net Revenues 2,203 1,333 2,545 5,778 7,169

Gross Profit 1,478 945 1,954 3,518 6,244

Operating EBITDA (3,734) (4,972) (2,602) (1,000) 1,645

Depreciation And Amortisation (503) (391) (323) (327) (330)

Operating EBIT (4,237) (5,363) (2,926) (1,327) 1,315

Financial Income/(Expense) (1,179) (576) 0 0 0

Pretax Income/(Loss) from Assoc. 0 0 0 0 0

Non-Operating Income/(Expense) 0 0 0 0 0

Profit Before Tax (pre-EI) (5,416) (5,939) (2,926) (1,327) 1,315

Exceptional Items (1,796) (312) 0 0 0

Pre-tax Profit (7,212) (6,251) (2,926) (1,327) 1,315

Taxation 0 0 0 0 (223)

Exceptional Income - post-tax

Profit After Tax (7,212) (6,251) (2,926) (1,327) 1,091

Minority Interests

Preferred Dividends

FX Gain/(Loss) - post tax

Other Adjustments - post-tax

Preference Dividends (Australia)

Net Profit (7,212) (6,251) (2,926) (1,327) 1,091

Normalised Net Profit (5,416) (5,939) (2,926) (1,327) 1,091

Fully Diluted Normalised Profit (5,416) (5,939) (2,926) (1,327) 1,091

Cash Flow


EBITDA (3,734) (4,972) (2,602) (1,000) 1,645

Cash Flow from Invt. & Assoc.

Change In Working Capital (163) 70 (121) 557 (1,200)

(Incr)/Decr in Total Provisions

Other Non-Cash (Income)/Expense 177 1,336 0 0 0

Other Operating Cashflow

Net Interest (Paid)/Received (1,179) (576) 0 0 0

Tax Paid 0 0 0 0 (223)

Cashflow From Operations (4,899) (4,142) (2,723) (443) 221

Capex (315) (56) (300) (300) (300)

Disposals Of FAs/subsidiaries 0 1 0 0 0

Acq. Of Subsidiaries/investments (124) (150) (100) (100) (100)

Other Investing Cashflow

Cash Flow From Investing (439) (205) (400) (400) (400)

Debt Raised/(repaid) 5,562 (131) 0 0 0

Proceeds From Issue Of Shares 0 14,539 0 0 0

Shares Repurchased (1) (7) 0 0 0

Dividends Paid

Preferred Dividends

Other Financing Cashflow 0 (1,588) 0 0 0

Cash Flow From Financing 5,561 12,813 0 0 0

Total Cash Generated 223 8,466 (3,123) (843) (179)

Free Cashflow To Equity 224 (4,478) (3,123) (843) (179)

Free Cashflow To Firm (4,159) (3,771) (3,123) (843) (179)

We expect robust topline growth and marginal cost efficiency to underpin narrowing net losses over FY19-20F,

with potential turnaround to net profit in FY21F.

We project steady capex of S$0.3m

p.a and acquisition of intangible assets of S$0.1m p.a. in FY19-21F as the group continues to engage in

R&D.



19

BY THE NUMBERS… cont’d


Balance Sheet


Total Cash And Equivalents 2,455 11,499 8,376 7,532 7,353

Total Debtors 650 987 1,162 1,787 2,092

Inventories 979 777 777 777 777

Total Other Current Assets 0 0 0 0 0

Total Current Assets 4,084 13,263 10,315 10,097 10,223

Fixed Assets 503 351 352 353 353

Total Investments 0 0 0 0 0

Intangible Assets 619 578 653 726 795

Total Other Non-Current Assets 0 0 0 0 0

Total Non-current Assets 1,122 929 1,006 1,078 1,148

Short-term Debt 0 0 0 0 0

Current Portion of Long-Term Debt

Total Creditors 1,209 1,532 1,586 2,768 1,873

Other Current Liabilities 9,794 0 0 0 0

Total Current Liabilities 11,003 1,532 1,586 2,768 1,873

Total Long-term Debt 0 0 0 0 0

Hybrid Debt - Debt Component 18,049 0 0 0 0

Total Other Non-Current Liabilities 0 101 101 101 101

Total Non-current Liabilities 18,049 101 101 101 101

Total Provisions 0 0 0 0 0

Total Liabilities 29,052 1,633 1,687 2,869 1,974

Shareholders' Equity (23,846) 12,559 9,633 8,306 9,397

Minority Interests

Total Equity (23,846) 12,559 9,633 8,306 9,397

Key Ratios

Dec-17A Dec-18A Dec-19F Dec-20F Dec-21F

Revenue Growth 7% (39%) 97% 130% 24%

Operating EBITDA Growth 1.2% 33.2% (47.7%) (61.6%) N/A

Operating EBITDA Margin (179%) (392%) (104%) (17%) 23%

Net Cash Per Share (S$) (0.073) 0.047 0.035 0.031 0.030

BVPS (S$) (0.11) 0.05 0.04 0.03 0.04

Gross Interest Cover (3.59) (9.31) N/A N/A N/A

Effective Tax Rate 0.0% 0.0% 0.0% 0.0% 17.0%

Net Dividend Payout Ratio NA NA NA NA NA

Accounts Receivables Days 86.7 107.1 79.4 60.2 72.2

Inventory Days 350.0 826.0 479.9 125.8 306.6

Accounts Payables Days 261.0 527.3 206.9 154.4 432.7

ROIC (%) 312% 65% (252%) (98%) 150%

ROCE (%) 138% (159%) (26%) (15%) 15%

Return On Average Assets (94.9%) (55.3%) (22.9%) (11.8%) 9.7%

Key Drivers

Dec-17A Dec-18A Dec-19F Dec-20F Dec-21F

ASP (% chg, main prod./serv.) N/A N/A N/A N/A N/A

Unit sales grth (%, main prod./serv.) 31.3% -3.3% 73.1% 115.4% 25.2%

Util. rate (%, main prod./serv.) N/A N/A N/A N/A N/A

ASP (% chg, 2ndary prod./serv.) N/A N/A N/A N/A N/A

Unit sales grth (%,2ndary prod/serv) -18.2% -100.0% N/A 233.3% 20.0%

Util. rate (%, 2ndary prod/serv) N/A N/A N/A N/A N/A

Biolidics’s inventory days are long due to stocking-up of ClearCell

® FX1

System and its spare parts, while its

accounts payable days are distorted by equipment loan arrangements with other research institutes.

Biolidics has zero debt and net cash

of S$11.5m as at end-2018.

The key earnings driver for Biolidics is

the sale of ClearCell® FX1 System,

accompanied by CTChip® FR1

biochips used in LDTs. Project-related

revenue is a secondary earnings driver, in our view.



20

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CGS-CIMB India does not have actual / beneficial ownership of 1% or more securities of the subject company in this research report, at the end of the month immediately preceding the date of publication of this research report. However, since affiliates of CGS-CIMB are engaged in the financial services business, they might have in their normal course of business financial interests or actual / beneficial ownership of one per cent or more in various companies including the subject company in this research report.

CGS-CIMB or its associates, may: (a) from time to time, have long or short position in, and buy or sell the securities of the subject company in this research report; or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the subject company in this research report or act as an advisor or lender/borrower to such company or may have any other potential conflict of interests with respect to any recommendation and other related information and opinions.

CGS-CIMB India, its associates and the analyst engaged in preparation of this research report have not received any compensation for investment banking, merchant banking or brokerage services from the subject company mentioned in the research report in the past 12 months.

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Recipients of this report are to contact CGS-CIMB Research Pte Ltd, 50 Raffles Place, #16-02 Singapore Land Tower, Singapore in respect of any



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matters arising from, or in connection with this report. CGS-CIMBR has no obligation to update its opinion or the information in this research report. This publication is strictly confidential and is for private circulation only. If you have not been sent this report by CGS-CIMBR directly, you may not rely, use or disclose to anyone else this report or its contents.

If the recipient of this research report is not an accredited investor, expert investor or institutional investor, CGS-CIMBR accepts legal responsibility for the contents of the report without any disclaimer limiting or otherwise curtailing such legal responsibility. If the recipient is an accredited investor, expert investor or institutional investor, the recipient is deemed to acknowledge that CGS-CIMBR is exempt from certain requirements under the FAA and its attendant regulations, and as such, is exempt from complying with the following :

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CGS-CIMBR, its affiliates and related corporations, their directors, associates, connected parties and/or employees may own or have positions in specified products of the company(ies) covered in this research report or any specified products related thereto and may from time to time add to or dispose of, or may be materially interested in, any such specified products. Further, CGS-CIMBR, its affiliates and its related corporations do and seek to do business with the company(ies) covered in this research report and may from time to time act as market maker or have assumed an underwriting commitment in specified products of such company(ies), may sell them to or buy them from customers on a principal basis and may also perform or seek to perform significant investment banking, advisory, underwriting or placement services for or relating to such company(ies) as well as solicit such investment, advisory or other services from any entity mentioned in this report.

As of March 22, 2019, CGS-CIMBR does not have a proprietary position in the recommended specified products in this report.

CGS-CIMBR does not make a market on the securities mentioned in the report.

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CGS-CIMB is not registered with the Spanish Comision Nacional del Mercado de Valores to provide investment services.

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Thailand: This report is issued and distributed by CGS-CIMB Securities (Thailand) Co. Ltd. (“CGS-CIMB Thailand”) based upon sources believed to be reliable (but their accuracy, completeness or correctness is not guaranteed). The statements or expressions of opinion herein were arrived at after due and careful consideration for use as information for investment. Such opinions are subject to change without notice and CGS-CIMB Thailand has no obligation to update its opinion or the information in this research report.

CGS-CIMB Thailand may act or acts as Market Maker, and issuer and offerer of Derivative Warrants and Structured Note which may have the following securities as its underlying securities. Investors should carefully read and study the details of the derivative warrants in the prospectus before making investment decisions.

AAV, ADVANC, AMATA, AOT, AP, BANPU, BBL, BCH, BCP, BCPG, BDMS, BEAUTY, BEM, BGRIM, BJC, BH, BLA, BLAND, BPP, BTS, CBG, CENTEL, CHG, CK, CKP, COM7, CPALL, CPF, CPN, DELTA, DTAC, EA, EGCO, EPG, ERW, ESSO, GGC, GFPT, GLOBAL, GLOW, GPSC, GUNKUL, HANA, HMPRO, INTUCH, IRPC, ITD, IVL, KBANK, KCE, KKP, KTB, KTC, LH, LPN, MAJOR, MEGA, MINT, MTLS, ORI, PRM, PSH, PSL, PTG, PTT, PTTEP, PTTGC, QH, RATCH, ROBINS, RS, SAWAD, SCB, SCC, SGP, SIRI, SPALI, SPRC, STA, STEC, SUPER, TASCO, TCAP, THAI, THANI, TISCO, TKN, TMB, TOA, TOP, TPIPL, TPIPP, TRUE, TTW, TU, TVO, UV, WHA, WHAUP, WORK.

Corporate Governance Report:

The disclosure of the survey result of the Thai Institute of Directors Association (“IOD”) regarding corporate governance is made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the Market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information.

The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey result may be changed after that date. CGS-CIMB Thailand does not confirm nor certify the accuracy of such survey result.



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Score Range: 90 - 100 80 – 89 70 - 79 Below 70 or No Survey Result

Description: Excellent Very Good Good N/A

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United Kingdom and European Economic Area (EEA): In the United Kingdom and European Economic Area, this material is also being distributed by CGS-CIMB Securities (UK) Limited (“CGS-CIMB UK”). CGS-CIMB UK is authorized and regulated by the Financial Conduct Authority and its registered office is at 27 Knightsbridge, London, SW1X7YB. The material distributed by CGS-CIMB UK has been prepared in accordance with CGS-CIMB’s policies for managing conflicts of interest arising as a result of publication and distribution of this material. This material is for distribution only to, and is solely directed at, selected persons on the basis that those persons: (a) are eligible counterparties and professional clients of CGS-CIMB UK; (b) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Order”), (c) fall within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc”) of the Order; (d) are outside the United Kingdom subject to relevant regulation in each jur isdiction, material(all such persons together being referred to as “relevant persons”). This material is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this material relates is available only to relevant persons and will be engaged in only with relevant persons.

Where this material is labelled as non-independent, it does not provide an impartial or objective assessment of the subject matter and does not constitute independent “research” (cannot remove research from here under the applicable rules of the Financial Conduct Authority in the UK. Consequently, any such non-independent material will not have been prepared in accordance with legal requirements designed to promote the independence of research (cannot remove research from here) and will not subject to any prohibition on dealing ahead of the dissemination of research. Any such non-independent material must be considered as a marketing communication.

United States: This research report is distributed in the United States of America by CGS-CIMB Securities (USA) Inc, a U.S. registered broker-dealer and a related company of CGS-CIMB Research Pte Ltd, PT CGS-CIMB Sekuritas Indonesia, CGS-CIMB Securities (Thailand) Co. Ltd, CGS-CIMB Securities (Hong Kong) Limited, CGS-CIMB Securities (India) Private Limited, and is distributed solely to persons who qualify as “U.S. Institutional Investors” as defined in Rule 15a-6 under the Securities and Exchange Act of 1934. This communication is only for Institutional Investors whose ordinary business activities involve investing in shares, bonds, and associated securities and/or derivative securities and who have professional experience in such investments. Any person who is not a U.S. Institutional Investor or Major Institutional Investor must not rely on this communication. The delivery of this research report to any person in the United States of America is not a recommendation to effect any transactions in the securities discussed herein, or an endorsement of any opinion expressed herein. CGS-CIMB Securities (USA) Inc, is a FINRA/SIPC member and takes responsibility for the content of this report. For further information or to place an order in any of the above-mentioned securities please contact a registered representative of CGS-CIMB Securities (USA) Inc.

CGS-CIMB Securities (USA) Inc. does not make a market on other securities mentioned in the report.

CGS-CIMB Securities (USA) Inc. has not managed or co-managed a public offering of any of the securities mentioned in the past 12 months.

CGS-CIMB Securities (USA) Inc. has not received compensation for investment banking services from any of the company mentioned in the past 12 months.

CGS-CIMB Securities (USA) Inc. neither expects to receive nor intends to seek compensation for investment banking services from any of the company mentioned within the next 3 months.

Other jurisdictions: In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is only for distribution to professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.

Rating Distribution (%) Inv estment Banking clients (%)

Add 61.2% 4.2%

Hold 25.1% 2.1%

Reduce 13.7% 0.4%

Distribution of stock ratings and inv estment banking clients for quarter ended on 31 December 2018

758 companies under cov erage for quarter ended on 31 December 2018



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Spitzer Chart for stock being researched ( 2 year data )

Biolidics Ltd (BLD SP)

Corporate Governance Report of Thai Listed Companies (CGR). CG Rating by the Thai Institute of Directors Association (Thai IOD) in 2018, Anti-Corruption 2018

ADVANC – Excellent, Certified, AEONTS – Good, n/a, AH – Very Good, n/a, AMATA – Excellent, Declared, ANAN – Excellent, Declared, AOT – Excellent, Declared, AP – Excellent, Certified, ASP – Very Good, Certified, BANPU – Excellent, Certified, BAY – Excellent, Certified, BBL – Very Good, Certified, BCH – Good, Certified, BCP - Excellent, Certified, BCPG – Excellent, Certified, BEM – Very Good, n/a, BDMS – Very Good, n/a, BEAUTY – Good, n/a, BEC – Very Good, n/a, , BGRIM – Very Good, Declared, BH - Good, n/a, BJC – Very Good, Declared, BJCHI – Very Good, Certified, BPP – Very Good, Declared, BR - Good, Declared, BTS - Excellent, Certified, CBG – Very Good, n/a, CCET – Good, n/a, CENTEL – Very Good, Certified, CHG – Very Good, Declared, CK – Excellent, n/a, COL – Excellent, Declared, CPALL – Very Good, Certified, CPF – Excellent, Certified, CPN - Excellent, Certified, DELTA - Excellent, n/a, DEMCO – Excellent, Certified, DDD – Very Good, Declared, DIF – not available, n/a, DTAC – Excellent, Certified, EA – Excellent, n/a, ECL – Very Good, Certified, EGCO - Excellent, Certified, EPG – Very Good, n/a, ERW – Very Good, n/a, GFPT - Excellent, Certified, GGC – Excellent, Certified, GLOBAL – Very Good, n/a, GLOW – Very Good, Certified, GPSC – Excellent, Certified, GULF – Very Good, n/a, GUNKUL – Excellent, Certified, HANA - Excellent, Certified, HMPRO - Excellent, Certified, HREIT - Excellent, Certified ICHI – Excellent, Declared, HUMAN – not available, n/a, III – Good, n/a, INTUCH - Excellent, Certified, IRPC – Excellent, Certified, ITD* – Very Good, n/a, IVL - Excellent, Certified, JASIF – not available, n/a, KBANK - Excellent, Certified, KCE - Excellent, Certified, KKP – Excellent, Certified, KSL – Excellent, Certified, KTB - Excellent, Certified, KTC – Excellent, Certified, LH - Very Good, n/a, LPN – Excellent, Certified, M – Very Good, Certified, MACO – Very Good, n/a, MAJOR – Very Good, n/a, MAKRO – Excellent, Declared, MALEE – Very Good, Certified, MC – Very Good, Certified, MCOT – Excellent, Certified, MEGA – Very Good, n/a, MINT - Excellent, Certified, MTC – Excellent, Declared, NETBAY – Good, n/a, PLANB – Excellent, Declared, PLAT – Very Good, Certified, PSH – Excellent, Certified, PSTC – Good, Certified, PTT - Excellent, Certified, PTTEP - Excellent, Certified, PTTGC - Excellent, Certified, QH – Excellent, Certified, RATCH – Excellent, Certified, ROBINS – Excellent, Certified, RS – Very Good, n/a, RSP – not available, n/a, SAMART - Excellent, n/a, SAPPE – Very Good, Declared, SAT – Excellent, Certified, SAWAD – Very Good, n/a, SC – Excellent, Declared, SCB - Excellent, Certified, SCC – Excellent, Certified, SCN – Very Good, Certified, SF – Good, n/a, SIRI – Very Good, Certified, SPA - Good, n/a, SPALI - Excellent, n/a, SPRC – Excellent, Certified, STA – Very Good, Certified, STEC – Excellent, n/a, SVI – Excellent, Certified, SYNEX – Very Good, Declared, TASCO – Excellent, Certified, TCAP – Excellent, Certified, TIPCO – Very Good, Certified, TISCO - Excellent, Certified, TKN – Very Good, Declared, TMB - Excellent, Certified, TNR – Very Good, Declared, TOP - Excellent, Certified, TPCH – Good, n/a, TPIPP – Good, n/a, TRUE – Excellent, Certified, TU – Excellent, Certified, TVO – Very Good, Declared, UNIQ – Good, n/a, VGI – Excellent, Certified, WHA – Excellent, Certified, WHART – not available, n/a, WORK – Good, n/a.

Companies participating in Thailand’s Private Sector Collective Action Coalition Against Corruption programme (Thai CAC) under Thai Institute of Directors (as of August 31, 2018) are categorized into:

- Companies that have declared their intention to join CAC, and

- Companies certified by CAC

* The company, its director or management had been reportedly accused for breaching proper corporate governance such as violation of the SEC’s regulations or charged with corruption.

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Price Close



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Recommendation Framework

Stock Ratings Definition:

Add The stock’s total return is expected to exceed 10% over the next 12 months.

Hold The stock’s total return is expected to be between 0% and positive 10% over the next 12 months.

Reduce The stock’s total return is expected to fall below 0% or more over the next 12 months.

The total expected return of a stock is defined as the sum of the: (i) percentage difference between the target price and the current price and (ii) the forward net dividend yields of the stock. Stock price targets have an investment horizon of 12 months.

Sector Ratings Definition:

Overweight An Overweight rating means stocks in the sector have, on a market cap-weighted basis, a positive absolute recommendation.

Neutral A Neutral rating means stocks in the sector have, on a market cap-weighted basis, a neutral absolute recommendation.

Underweight An Underweight rating means stocks in the sector have, on a market cap-weighted basis, a negative absolute recommendation.

Country Ratings Definition:

Overweight An Overweight rating means investors should be positioned with an above-market weight in this country relative to benchmark.

Neutral A Neutral rating means investors should be positioned with a neutral weight in this country relative to benchmark.

Underweight An Underweight rating means investors should be positioned with a below-market weight in this country relative to benchmark.

#01

Note: CGS-CIMB Research is a participant in the SGX StockFacts Research Programme and receives fees from the account maintained by SGX for providing research coverage on the Company.

add liquid could be the new solid · liquid biopsies to test for the presence of circulating tumour...

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