SINGAPORE (July 3): Only 1% of the hundreds of leads that is being reviewed yearly by The Trendlines Group is selected to be its portfolio company.

The leads not only come from Israel, but also Singapore, Malaysia, Australia and Thailand.

Over the past 12 months, Trendlines’ management has implemented several measures that demonstrated its commitment to shareholders.

This included its plans last Oct to reduce FY18 operating expenses by US$1.3 million ($1.8 million). In April,  CEOs of the groups also won approval from shareholders to peg their 2018 bonuses to defined targets and stipulated limits.

Soon Trendlines will launch of B. Braun’s new ostomy product licensed from its portfolio company Stimatix GI which is also the group’s Most Valuable Portfolio Company. Royalties from the sale of the product will supplement operating cash flows.

Other portfolio companies have also gained good momentum this year. BioFishency recorded sales of US$0.8 million in 1Q18 following sales of only US$0.55 million in 2017. Likewise, EdenShield is targeting sales of US$2.5 million for 2018, following sales of US$0.45 million in 2017.

As at 11.50am, Trendlines is trading at 12 cents, or about 0.6 times its book value as at March 31. Market capitalisation of $72.4 million is backed by cash net current assets of $16.6 million and a portfolio value of US$97.4 million or an average of US$1.16 million per portfolio company -- excluding Stimatix GI -- as at March 31.

In a recent report, NRA Capital is maintaining Trendlines at “overweight” with a fair value of 22.5 cents.

“We reiterate that Trendlines remains undervalued ... with a high-average return and average risk view,” says analyst Liu Jinshu.