Cordlife

Cordlife: Maybank-KE reiterated its BUY call and TP of $1.30 on the counter, following a meeting with China's leading cord blood bank, China Cord Blood Corporation (CCBC). According to the house, Cordlife’s recent sell-down was led by the lack of understanding and appreciation for the motivation behind the recent US$50m purchase of CCBC's convertible notes and a US$46.5m loan extended to Magnum Opus International, a company controlled by CCBC's management team. Maybank-KE believes that Cordlife's current mere 10% stake in CCBC (14.2% upon conversion of full convertible notes in 2017), allowed the company to hit far above its weight, as new products by Cordlife are being pushed out through CCBC's vast China network. While the loan to Magnum Opus was unorthodox, it was necessary to cement the relationship with CCBC. House views the loan as a proxy to influence the equity portion held by CCBC's management, terms it a "master-class move by a grandmaster".