Posts: 785
Threads: 9
Joined: Aug 2013
Reputation:
12
Though the prospect is good, valuation is simply too high IMO. My wife once bought it at 60c something. There are many SGX listed with good prospect but also minus 10-20% due to recent market sentiment. Purely my own opinion, I would consider buying only if below 80c.
Posts: 2,743
Threads: 23
Joined: Mar 2013
Reputation:
25
As a consumer, I would not want to store my child's cord blood with listed cord blood bank run by PRCs.
Prefer Stemcord. At least they have contingent planning by storing 2 bags at 2 separate locations.
But most people dont bother with the details. They will be sold to by commissioned salespeople at baby fairs.
"... but quitting while you're ahead is not the same as quitting." - Quote from the movie American Gangster
Posts: 66
Threads: 0
Joined: Jun 2014
Reputation:
6
Cordlife cannot be looked at on a simple PE multiple because their revenue recognition involves booking discounted revenues on cash to be received many years in the future. Take a look at the size of the non current receivables on their balance sheet to get an idea of the quantum of this - very big.
On a cash flow basis, last time I checked, the company is just positive but significantly less than an uninformed reading of the P&L would suggest.
This is not saying the company is doing something shady (after all, auditors have signed off on the revenue recognition) but you need to have a view on a) the bad debt risk on the recievables (from what I recall they take specific provisions against non performing accounts but no general provision) and b) whether the company can generate enough cash (from operations and financing) to sustain it's administrative costs and marketing expenses.
If you have a favourable view then the company might well be worth far greater than current market pricing - but either way you need to have a view and not simply look at the PE multiple.
Posts: 66
Threads: 0
Joined: Jun 2014
Reputation:
6
Actually my point is the exact opposite - their revenue is not as recurring as you might think as much of the recurring cash payments are booked up front.
Posts: 66
Threads: 0
Joined: Jun 2014
Reputation:
6
03-11-2014, 11:37 PM
(This post was last modified: 03-11-2014, 11:38 PM by roxhockey.)
Incorrect - unearned revenue is when cash has been received, but revenue not recognised. Here it's the opposite and shows up on their balance sheet as 'other receivables'. Quantum is 45m ie one years revenue.