Cordlife Group is one company we should try to understand and put on our radar screen. Unique business as cord blood banking provider. It plans to buy 10 per cent of China Cord Blood Corporation, China's largest cord blood bank operator. Quite an impressive move and it is getting into China, which will boost its earnings per share to 5.85 Singapore cents from 3.64 cents before, it said. (Closing S$0.51).
Mkt players take most new IPOs as a 1 week play. after that it takes time for the company to prove itself before it can gain the trust of the investment public. What attracts me to Cordlife business is its cash flow nature. Any insurance agents out there ? Its revenue model is similar to being an insurance agent. 1st year you sign up x clients, 2nd yr u sign up y clients. 3rd yr u sign up z clients. every year you get new business revenue plus renewnal revenue from sign ups from previous years. as the years go on, once the critical number to cover fix cost is attained, most of the revenue flows straight down to bottomline except maybe for more marketing, awareness and educational expense to generate business. also, I don't think anyone mentioned this before. I have never come across a company that pays a dividend 2 mths after it has gone IPO.
Gulu have raise up very good point comparing Cordlife business to Insurance business.Insurance companies have to pay out if there is a claim but Cordlife will have more business if there is a need for cord blood. See Cordlife payment plan: