Company Name: CORDLIFE GROUP LIMITED
| Research House: UOB KayHian | Price Call: BUY | Target Price: 0.66 |
UOB Kay Hian has initiated coverage of Cordlife Group, a cord blood and tissue banking service provider, rating the company a buy with a target price of $0.66 and citing its growth potential in Asia.
Shares of Cordlife were up 0.9% atS$0.565, but have fallen 17% since its market debut in March. Its shares are still above its IPO price of $0.495.
Cordlife has the right-of-first-refusal to acquire business assets in high-growth developing markets such as India, the Philippines and Indonesia, which have one of the lowest penetration rates for cord blood banking services in Asia, UOB said.
It added that the company also has a 10% indirect stake in Guangzhou Tianhe Nuoya Biology Engineering, which holds the sole licence to operate a blood bank in Guangdong, China.
An increase in healthcare spending in China and an expanding middle class will help to drive Cordlife’s growth in the country, UOB said.
The broker expects Cordlife’s earnings per share to grow at an average 13.6% a year over the next two years.
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