Placenta Juice

I have read about Cordlife few weeks or months ago and immediately develop an affection for this company. Why?

• This guy controls 62% of Singapore's market share.
• Has more than 35,000 units of cord blood banked in Singapore and Hong Kong.
• There are only 7 authorised cord blood banks in China and the country only allows each province to have a single licensed cord blood bank. And this guy owns a 10% stake in a PRC cord blood bank in Guangdong, the only foreign entity to have an equity stake in a Chinese cord blood bank.
• Most probably I will store my kids' cord blood with them someday.

This going-to-be new kid on the block public offer opens today and closes at noon on March 27, and will commence trading on SGX mainboard on March 29. Few points to note:

• Intend to raise S$26.3mil net proceeds from its IPO, issue 60mil shares @ S$0.495: 58mil placement/2mil public.
• June year end, will pay out at least 25% of FY2011's S$8.5mil NP as dividend.

Use of proceeds as follows:

• S$16.6mil to expand market in Singapore and Hong Kong and fund acquisition in Indonesia, India and the Philipines.
• S$3mil to renovate its HQ at Yishun to house 650,000 cord blood units, more than 10 times of its current capacity.
• The rest for working cap, i reckon.

I wouldn't want to blab about the wonders of cord blood here as you can roll over to wikipedia or google it effortlessly. I am more interested in the maths:
Say I buy Cordlife's share at 49.5 cents now and somewhere in October it pays out the S$2.13mil dividend, so per share I will be receiving 3.55 cents, which is a pleasing 7.17% DY without considering its upsides. And if this guy sort of plunges after listing, I will be ready to pump in my reserve to buy up more - this will increase the DY.

Think I better head down to one of the POSB ATMs today to apply for some shares and keep my fingers crossed.

Disclaimer: This is not an invitation to buy or sell. I do not guarantee the accuracy or validity of the information above. Do your own due diligence before investing and invest at your own risk.