Solid FY2013, Ready for a Better FY2014
• Intrinsic Value S$1.40
• Prev Closing Price S$1.215
Cordlife Group Limited’s (Cordlife) FY13 performance was better than expected, with revenue and PAT of S$34.7m and S$13.5m vs estimates of S$31.1m and PAT of S$11.6m. The differences were mainly due to 1) S$3.4m interest income from non-current trade receivables which was reclassified as revenue, 2) one-off gains and losses from the disposal of associate, fair value gain from investment properties, professional fees and others and 3) stronger contribution from its associates.
In all, organic YoY PAT growth (excluding all one-off gain or loss in FY12 and FY13) amount to about 19%, mainly backed by higher client deliveries (increase of 500 to 7,700) and economies of scale. We are also excited about Cordlife’s transitioning from a private cord blood company to a multi-product healthcare company, which may bring about even faster than projected sales growth. We await the disclosure from the company before incorporating the numbers into our model. Recommend Invest with an intrinsic value of S$1.40.
Results Summary: 4Q revenue and gross profit stood at S$10.9m and S$8.9m respectively (up 46% and 69% YoY) mainly due to the change in classification of certain interest income. Excluding that, 4Q revenue was flat YoY at S$7.5m while gross profit climbed 5% YoY to S$5.5m. For FY13, SG&A expenses (excluding one-off expenses) climbed by 20% YoY to S$17m, in line with gross profit growth. There was also a oneoff gain of S$2.9m. Consequently, FY13 PBT rose by 87% YoY to S$14.6m.
Balance sheet remained firmed with S$6.2m of borrowings and cash equivalents and fixed deposits of S$11.5m. There were some substantial changes in trade receivables, trade payables and others mainly due to the consolidation of numbers from the three newly purchased entities. Cash from operating activities rose from S$6.0m to S$8.6m. The company also recommended 1 S cent final dividend.
Publish date: 28/08/13