CORDLIFE GROUP

Cordlife generated good net margins of 33% for the year ended 30 Jun 2011. Company is already profitable and paying up dividend.
Singapore has a baby bonus scheme to encourage childbirth as follows:

1) a cash gift of S$4,000 (for the first and second child) and S$6,000 (for the third and fourth child) given in four equal installments into the children’s Child Development Account (CDA),

2) a dollar for dollar government matching contribution up to a certain limit will be made available to the CDA before the child turns 6 years of age.

The CDA can be used to pay for fees incurred in healthcare institutions licensed under the Private Hospitals and Medical Clinics Act, and this includes Cordlife.
According to the Market Research Report conducted by Deloitte & Touche Financial Advisory Services Limited (“DTFAS”) dated 7 March 2012, Singapore’s private cord blood banking market is expected to keep growing. The penetration level of private cord blood banking is expected to rise 38% by 2015 from 24% in 2010. While falling fertility rate is a concern, the nation has been experiencing constant birth rates of around 38,000 new births a year. According to the DTFAS report, private cord blood banking has enjoyed a growth rate of around 16% over the past four years, mainly due to a government subsidy of 50% of the collection fee through the “Child Development Co-Saving” scheme. Rising public awareness and acceptance – in part because of higher rate of success for transplants, and in part because of a more highly-educated population – contributed to this growth.
Cordlife is debt free and with strong cash of $33.6m to growth it's oversea market such as the recent one with China Cord Blood corporation.
During the month of May 2012, 2 of the directors have been buying up Cordlife shares. Soon to announce FY2012 result may be the catalyst for Cordlife share price to rise.

Rock, the net profit margins are superb.

But I hesitate to jump into the stock because the earnings in 2011 and 2010 are flat and it will be down this year because of IPO expenses. The dividend payout will not be too great at around 3-4% yield. The stock price has to go lower to perhaps 45 cents or even 40 cents before I open my wallet.

Just my view, and I wish you and other supporters of Cordlife lots of best wishes.

Hi Chongwee,
Do you foresee any major correction coming soon?
For Cordlife, is $0.51 a good price to enter as it has dropped a lot?
 

Viva, Cordlife growth is more than 10% may not look exciting. The IPO expense of $1.3m is only one off. Look at Thomson Med growth is about 10% too, share price gradually rise to $1 and was later bought over by Peter Lim @ $1.75. The market is very uncertain, Cordlife with 3-4% is still good value.
During 2009 I happily bought recession-proof companies such as Biosensors, First Reit, Thomson Med, Techcomp, Bonvest & Stamford Land. For the 2 years 2009/2010 my return almost 200%. For 2011 and this year, so far my return about 10-15% a year. Many of these companies are muti-baggers.
To achieve muti-baggers we’ve to maintain “Helicopter View” rather than “day to day view.”
I believe in going for “Long/short”. Long – To be vested in the companies for as long as possible. Short – to take profit or cut loss if the companies over-run it’s value or the fundamental of the companies is in question. I sold out Biosensors at $1.40 when the chairman sold it’s holding but today I return gradually back to Biosensors.
So Viva don’t wait to buy low. Buy gradually when you see potential in the companies because you may miss the boat. My average for Cordlife is 48c.

Cordlife has just reported FY12 results.

Without IPO expenses, net profit up 4.1% to S$8.8 million. This looks pretty flattish. Third year of flat profits.

Due to one-off IPO expenses and higher capital expenditures to drive business growth, net profit decreases to S$6.9 million

The Sweetener is another Special dividend of 1.8 cents.

I don't think the stock can fly ... (until the growth phase kicks in).

Cordlife CEO bought 100 lots at 52.5c.