Cordlife Group

Though the prospect is good, valuation is simply too high IMO. My wife once bought it at 60c something. There are many SGX listed with good prospect but also minus 10-20% due to recent market sentiment. Purely my own opinion, I would consider buying only if below 80c.

As a consumer, I would not want to store my child's cord blood with listed cord blood bank run by PRCs.

Prefer Stemcord. At least they have contingent planning by storing 2 bags at 2 separate locations.

But most people dont bother with the details. They will be sold to by commissioned salespeople at baby fairs.

(02-11-2014, 10:03 AM)valuebuddies Wrote: Though the prospect is good, valuation is simply too high IMO. My wife once bought it at 60c something. There are many SGX listed with good prospect but also minus 10-20% due to recent market sentiment. Purely my own opinion, I would consider buying only if below 80c.

After doing own calculations, the pe ratio is quite high at the moment without the one off valuation gain. With property maybe trending downwards, there could be one off valuation loss since now it is marked to market and earnings will be more volatile.

I will avoid now and yes 80 cents has more margin of safety.

Cordlife cannot be looked at on a simple PE multiple because their revenue recognition involves booking discounted revenues on cash to be received many years in the future. Take a look at the size of the non current receivables on their balance sheet to get an idea of the quantum of this - very big.

On a cash flow basis, last time I checked, the company is just positive but significantly less than an uninformed reading of the P&L would suggest.

This is not saying the company is doing something shady (after all, auditors have signed off on the revenue recognition) but you need to have a view on a) the bad debt risk on the recievables (from what I recall they take specific provisions against non performing accounts but no general provision) and b) whether the company can generate enough cash (from operations and financing) to sustain it's administrative costs and marketing expenses.

If you have a favourable view then the company might well be worth far greater than current market pricing - but either way you need to have a view and not simply look at the PE multiple.

(03-11-2014, 12:58 AM)roxhockey Wrote: Cordlife cannot be looked at on a simple PE multiple because their revenue recognition involves booking discounted revenues on cash to be received many years in the future. Take a look at the size of the non current receivables on their balance sheet to get an idea of the quantum of this - very big.

On a cash flow basis, last time I checked, the company is just positive but significantly less than an uninformed reading of the P&L would suggest.

This is not saying the company is doing something shady (after all, auditors have signed off on the revenue recognition) but you need to have a view on a) the bad debt risk on the recievables (from what I recall they take specific provisions against non performing accounts but no general provision) and b) whether the company can generate enough cash (from operations and financing) to sustain it's administrative costs and marketing expenses.

If you have a favourable view then the company might well be worth far greater than current market pricing - but either way you need to have a view and not simply look at the PE multiple.

Hi,

I dont look at P/E ratio simply. I see that their earnings not be performing so well after focusing more on marketing and the one off gain has drastically skewed the earnings. And when the one off gain is gone, it will be ugly.

I do know that their revenue is recurring but for a share to keep performing, it must have more fantastic growth which apparently now is less possible.

Actually my point is the exact opposite - their revenue is not as recurring as you might think as much of the recurring cash payments are booked up front.

(03-11-2014, 09:11 PM)roxhockey Wrote: Actually my point is the exact opposite - their revenue is not as recurring as you might think as much of the recurring cash payments are booked up front.

If they are booked up front, it will be unearned revenue. It will be in the balance sheet not in the profit and loss.

Thanks

Incorrect - unearned revenue is when cash has been received, but revenue not recognised. Here it's the opposite and shows up on their balance sheet as 'other receivables'. Quantum is 45m ie one years revenue.

(03-11-2014, 11:37 PM)roxhockey Wrote: Incorrect - unearned revenue is when cash has been received, but revenue not recognised. Here it's the opposite and shows up on their balance sheet as 'other receivables'. Quantum is 45m ie one years revenue.

Ok I have misinterpret your book up front. Yes there will be drop off as time goes by and this is a guess for us.

The third party offeror has been revealed. Interesting to see what the terms of their offer are

http://cordlife.listedcompany.com/newsro...K9IB.1.pdf