Cordlife Group

[Musicwhiz]

Geee, a company can do an IPO with this kind of business?

The Straits Times
Mar 8, 2012
companies
Cordlife eyes SGX listing, files prospectus

By Melissa Tan

A FIRM that collects and stores umbilical cord blood is eyeing a public listing on the Singapore Exchange (SGX).

Cordlife Group has lodged its preliminary prospectus with the Monetary Authority of Singapore for the proposed listing.

New shares will be distributed by public offer and placement, although the price has not been released yet.

The firm's services include collecting, processing, testing, preserving and storing umbilical cord blood at birth. It has centres here and in Hong Kong.

Cord blood contains stem cells, which 'have a number of potential uses and are considered particularly promising for medical therapies', Cordlife said.

It also began providing umbilical cord tissue banking services in Hong Kong in March last year.

The prospectus notes that it is 'currently also exploring the possibility' of offering umbilical cord tissue banking services here. It has begun discussions with the Health Ministry on licensing requirements.

Cordlife said it would use the proceeds from its initial public offering (IPO) to fund the development and expansion of its operations, its proposed new facility at Yishun and to invest in infrastructure. The proceeds would also go towards working capital and general corporate purposes, it added.

The firm, incorporated in May 2001, has a market share of around 62 per cent in Singapore and 28 per cent in Hong Kong, according to Deloitte & Touche Financial Advisory Services.

Cordlife posted a net profit of $1.86 million for the 2012 first quarter ended Sept 30 last year, down from $1.94 million in the same three months the year before.

Revenue for the three months to Sept 30 last year was $7.27 million, up from $6.21 million for the same period the year before.

Net profit for the 2011 financial year was $8.48 million, up from $8.27 million in 2010.

This translated to earnings per share of 5.62 cents for 2011, compared with 5.48 cents for 2010.

For the 12 months ended June 30 last year, revenue was $25.7 million, down from $28.2 million in the corresponding period the year before.

Cordlife's net asset value per share was 28.5 cents as of Sept 30 last year.

[header]

There is already a similar company listed in Malaysia. Cannot recall the name. I wonder how did that company perform post IPO?

[psolhawk]

Cordlife merely provides a service of storing cord blood cells. There is already a strong scientific background for NOT privately storing your child's cord blood cells since if the child is sick, his or her cord blood cells may not be used on him/herself. It only becomes useful if the child is healthy and the cord blood cells are used for the child's siblings. THEN again, cord blood cells from compatible donors may be used, that's the advocacy for public banking instead of private banking. This IPO doesnt feel safe to me. Should public banking of cord blood cells become the more accepted norm (I am not sure which has more business now, the SGH cord blood bank which is a free service, or Cordlife), this business may not be too viable.

What now with the decline in baby births, each family may have only 1 or 2 children so the utility of private cord blood banking may not be that great. Those with 4 or 5 children may not be able to afford to bank all their children's cord blood privately.

[brattzz]

let classify this biz under "logistics"...

[sgd]

window dressing to show this kind of thing can also have chance for IPO.

62% market share but only 1.8mil profit to show for I don't see demand for such services to be very great.

But then again blood cord could turn out to be exciting also as it reminds me a little of the business of China Milk's pedigree bull semen sperm bank business

[kazukirai]

62% market share but only 1.8mil profit to show for I don't see demand for such services to be very great.

Minor correction.

Cordlife posted a net profit of $1.86 million for the 2012 first quarter ended Sept 30 last year,

Other (probably) relevant figures (extracted from the article):

Net profit: 2011- $8.48 million, 2010- $8.27 million.
EPS: 2011- 5.62 cents, 2010- 5.48 cents.
NAV per share: 28.5 cents as of Sept 30 last year.

[shanrui_91]

it might be interesting to note that it "was" listed in the Asx

http://www.asx.com.au/asx/research/compa...sxCode=CBB

The parent company suffered losses and did a demerger from its Hong Kong and Singapore business. Now they claim that they are separate companies...

[weijian]

Extract from Warren Buffett's 2011 Annual letter to shareholders:

The first law of capital allocation – whether the money is slated for acquisitions or share repurchases – is that what is smart at one price is dumb at another. (One CEO who always stresses the price/value factor in repurchase decisions is Jamie Dimon at J.P. Morgan; I recommend that you read his annual letter.)

In an IPO, how do we assign the 'smart' and 'dumb' prices? Which is to the seller and the buyer?

[Musicwhiz]

Closed at 68 cents today, up 37.3% from IPO price.

Business Times - 29 Mar 2012

Cordlife Group's IPO 3.8 times subscribed

By LYNN KAN

IPO-STARVED investors flocked like bees to honey with the initial public offering of Cordlife Group Ltd, the Singapore Exchange's first listing this year. The private cord blood bank's 60 million new shares priced at 49.5 cents apiece were 3.8 times subscribed when applications closed on Tuesday at noon.

Cordlife's 58 million placement shares attracted strong interest from institutional investors. Coop International, Johnson Tan Chin Kwang, and Eastspring Investments (Singapore) each took up more than 5 per cent of the invitation shares. As for the two million public offer shares, over 3,600 valid applications for 172.3 million shares were received. Application monies from the public offer amounted to $85.3 million. Cordlife is No 1 private cord blood bank in Singapore and No 2 in Hong Kong. It also has a 10 per cent stake in Guangzhou Tianhe Nuoya Biology Engineering Co.

Cordlife will use the bulk of the net proceeds of $26.3 million - $16.6 million - to expand its overseas operations. Some $3 million will be used to renovate its new headquarters and facilities at A'Posh Bizhub in Yishun. The new facilities will be able to store up to 650,000 units of cord blood.

Currently, Cordlife collectively banks 35,000 cord blood units in both Singapore and Hong Kong.

Said Jeremy Yee, executive director and chief executive officer of Cordlife Group: 'We are encouraged by the enthusiastic response from institutional and retail investors to our IPO, and heartened by the investing community's confidence in the group and our growth prospects.'

[MrValue]

Hope I can sell short - put warrent, CFD ?