Market leader in cord blood banking. Cordlife provides cord blood banking services in Singapore and Hong Kong. Its servi
SMC Research
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Cordlife Group Ltd Bloomberg: CLGL SP | Reuters: CORD.SI
DBS Group Research . Equity
7 Dec 2012
NOT RATED S$0.535 STI : 3,078.20
Stable recurring income
Return *: 1 Risk: Moderate Potential Target * : 12-Month S$ 0.65 (21% upside)
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Larger of only two private cord blood banks in Singapore; among the top 3 in Hong Kong
Analyst LING Lee Keng +65 6398 7970
[email protected]
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Increasing penetration rate and awareness of cord blood banking to drive growth
Andy SIM CFA +65 6398 7969
[email protected]
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Stable recurring income; potential acquisitions in Indonesia, India and Philippines
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Fair value of S$0.65 offers 21% potential upside
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Price Relative S$
The Business
R e la t iv e In d e x
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Market leader in cord blood banking. Cordlife provides cord blood banking services in Singapore and Hong Kong. Its services include the collection, processing, testing, cryopreservation and storage of umbilical cord blood at birth. It also provides umbilical cord tissue banking services in Hong Kong.
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0 .6 142
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0 .5 0 .4 M a r -1 2
82 J u n -1 2
C o r d lif e G r o u p L t d ( L H S )
S e p -1 2
R e la t iv e S T I IN D E X ( R H S )
Forecasts and Valuation FY Jun (S$ m)
Turnover EBITDA Pre-tax Profit Net Profit Net Pft (Pre Ex.) EPS (S cts) EPS Pre Ex. (S cts) EPS Gth (%) EPS Gth Pre Ex (%) Diluted EPS (S cts) Net DPS (S cts) BV Per Share (S cts) PE (X) PE Pre Ex. (X) P/Cash Flow (X) EV/EBITDA (X) Net Div Yield (%) P/Book Value (X) Net Debt/Equity (X) ROAE (%) Consensus EPS (S cts): Other Broker Recs:
2012A
2013F
2014F
2015F
29 7 8 7 7 3.0 3.0 (47) (47) 3.0 2.0 30.6 18.0 18.0 20.6 16.1 3.7 1.7 CASH 12.4
32 10 10 9 9 3.8 3.8 28 28 3.8 1.9 32.5 14.0 14.0 18.0 11.1 3.6 1.6 CASH 12.1
35 11 12 10 10 4.3 4.3 12 12 4.3 2.1 34.6 12.5 12.5 16.6 9.8 4.0 1.5 CASH 12.7
41 13 13 11 11 4.9 4.9 15 15 4.9 2.5 37.1 10.9 10.9 13.6 8.3 4.6 1.4 CASH 13.7
4.8 B: 1
4.3 S: 0
4.9 H: 1
ICB Industry : Consumer Services ICB Sector: General Retailers Principal Business: Provides cord blood banking services in Singapore and Hong Kong. Its services include the collection, processing, testing, cryopreservation and storage of umbilical cord blood at birth.
Increasing penetration rate and awareness of cord blood banking to drive growth. According to the group’s IPO prospectus, penetration level in Singapore is expected to rise to 38% by 2015, from 24% in 2010. In Hong Kong and China, penetration rate is expected to deepen to 20.6% and 5% in 2015, from 11.5% and 2% respectively in 2000. Stable recurring income, acquisitions to boost revenue. The bulk of its revenue is recurring, as >50% of its customers are on an annual payment scheme. Cordlife’s target acquisition markets include Indonesia, India and the Philippines.
The Stock Fair value S$0.65. The stock current trades at 14.0x FY13F PE. We believe a target PE of 16x based on a slight (
