Cordlife

Cordlife: strong 3QFYJun13 results. Revenue at $6.7m, -2.6% yoy, mainly due to a decrease in the no. of client deliveries from HK, which was affected by the moratorium on Mainland mothers giving birth in HK. Net profit at $1.2m, +47.6% yoy, aided by a 23% drop in admin expenses (lack of $1.9m IPO expenses incurred in 3Q12) and lower income tax. Notably , at 9MFY13, net profit of $9.7m has already surpassed consensus FY13e expectations of $9.6m. Mgt anticipate growth in the market, citing positive statistics: total fertility rate improved from 1.2 to 1.29 over 2012, and analysts expect a perk up in birth rates from 2014 given Singapore govt’s push to encourage Singaporeans to marry and have children. Believes this could benefit Cordlife. Also the group expects its new services offering – the storage of umbilical cord tissue – will generate additional income in the coming months. Going forward, the group remains confident of its performance as it continues to leverage on its mkt position and brand equity and ride on positive industry momentum. Expects to remain profitable for FY13. At last close at $0.815, the stock trades at 14.7x annualized 9MFY13 P/E, 2.5x P/B. This compares with local healthcare players Raffles Medical (30.8x P/E, 4.5x P/B), Q&M Dental (34.6x P/E, 6.0x P/B), Healthway Medical (29.4x P/E, 1.1x P/B).