Brief - CBB - Cordlife Limited
The dramatic fall from $0.85 in July 07 to $0.27 recently has prompted this quick review / analysis. (Have not been too frequent in blogging due to Computer upgrade - hope to pick up soon). Within this period of sharp decline, there had been no bad news from the company.
CBB is a cord banking business. Its business is in storing umbilical cords blood for the purpose of using for future treatment or stem cell therapy. CBB has its main operations in Singapore and is active in the Asia Pacific region. Offices are found in Singapore, Australia, Hong Kong, Thailand and the Phillipines and just opened in Indonesia. This is a relative good foreign market exposure.
According to the Dec 07 report, CBB is virtually debt free, with $9.5mil cash. Its current ratio (receivables/payables) is a healthy 1.6, like that of a big cap industrial stock. This is not a bio-R&D company but a cash generating business. Its NTA/share is $0.162 and comparing with today's price; the price/NTA = 1.66, quite low indeed.
Unlike research biotechs, CBB does not have the promise of a blockbuster drug. Although its financial position seem to be good at the moment, it is still making a loss. Its last half year operations loss is $2.2m. Its cash burn rate is about 4.3 half years or slightly over 2 years. Investors should expect CBB to be profitable in less than 2 years if they decide to invest.
Recommendation: Speculative buy at $0.25
Monday, April 21, 2008
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