Following up from Yesterday Trading Call on Cordlife, 1 July 2013. Cordlife has indeed managed to close above the critical 1.00 resistance level yesterday and surge even higher today. As mentioned, near term target now would be at 1.10 first where there are huge sellers stacked at this level currently. Today’s high as of now is 1.09 before it dipped slightly on profit taking. Likely to be supported above 1.05 then 1.00 strongly. As long as 1.05 is not broken down we are bullish in the short term. A break above 1.10 can pave the way for it to test the all time high set in May at 1.19.
Stop loss at 1.035
Maybank KE – 1ST JULY 2013
Cordlife Group: The Cords That Bind; Initiate at BUY TP $1.29
Ø Initiate coverage with buy at street high target price of SGD1.29. Cordlife is an umbilical cord blood bank which provides cord blood and cord tissue storage services in 6 countries with either high penetration rate or high birth rate within Asia. Occupying a strong platform to expand its product range combined with a dominant position in Singapore, Philippines, Indonesia and strong presence in Hong Kong, India and China, it is poised to transform into Asia’s infant products champion over the next two years.
Ø At its current price, we believe the market has not fully priced in Cordlife’s favourable market position, strong regional presence, excellent product expansion opportunities, exceptional margins and high competitive advantages As a result, its valuation multiple is deeply depressed. Our TP of SGD1.40 is pegged at 23x FY14F PER, in line with its global peers and 27% discount to its local peers.
Ø The nationwide rollout of cord tissue banking coupled with completed acquisition of established operations overseas are expected to significantly boost Cordlife’s revenue in FY14F.
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