Cordlife Group (Cordlife) announced the proposed acquisition of a 19.9 per cent stake in StemLife Berhad (StemLife) at about RM29.6 million, which will be fulfilled via the issuance of 8 million Cordlife shares and RM2.85 million cash. The consideration is arrived at after taking into account StemLife's cash balances of RM76.8 million as at end-June 2013, freehold land with an original book value of RM6.9 million and its fundamental prospects. We see several benefits in this acquisition. First, it will enable Cordlife to expand its footprint into Malaysia and, potentially, Thailand. There may be an opportunity for a Cordlife-StemLife collaboration; they can cross-sell cord blood banking services in both nations and offer a different tier of services. More growth will also be generated following Cordlife's intention to extend its product offerings in the mother-child segment. StemLife will be able to improve its gross margin as it can now ride on Cordlife for bulk purchasing and adopt more effective and advanced systems.
The volume start picking up on end of Aug and maintain avg of daily 1m units, although in the overbought state, but price steadily up from 0.3 to ~0.48. Means someone is accumulating the share or more to long term buyers. I dont think it will drop below 0.4
My tp 0.70 to 1.00..foreign buy at 0.60 and inject fund to stemlife and use facilities..stemlife net profit will increase..they will push at 0.70 within 6 month before tapering complete mid 2014.
Dear Abundance and Kitty, ok now i'll say a bit on this counter. Abundance you asked me what is my TP, and my answer is RM1.20. Why? As mentioned before, this counter is full of potential ....R&D for stem cells is still discovering more and more ways to help cure diseases. So when everyone was criticizing this counter, people in this industry is taking note that this counter is undervalue, hence the buy over of 19% share in the company. What i think of this buy over of share in the company? GOOD NEWS!!! More market penetration in to Singapore!! More marketing to grow the company name and more revenue for this company. And since mostly they collect annual fees for storage hence more margin and high cash flow!!! :)
Kitty you asked when is the good time to go in? Depends whether you are a long term player or short term player. Long term you get back more than 100% is short term 20% to 30%.
Hope that helps both of you to make decisions. GOOD LUCK!!!
Welcome tzehming ;) If you have any lots hold on to it. Next year should touch Rm1 after the next annual report out. Already the last two years their profit has doubled.
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Abudance
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Posted by Abudance > 2013-09-26 12:21 | Report Abuse
Thanks, member for info. Appreciate it.