China Cord Blood Corporation net income jumps 56% in third quarter
China Cord Blood Corporation (NYSE: CO) a provider of cord blood collection, laboratory testing, hematopoietic stem cell processing, and stem cell storage services, reported solid growth in its fiscal third quarter and first nine months ended December 31, 2009.
Net revenues in Q3 2010 climbed 23.5% to US$10.1 million, while
net income leapt 56.3% to US$2.9 million as new subscriber sign-ups
during the quarter rose 19.6% to 11,771.
Revenue for the nine month period came in at US$27.9 million, an
increase of 38.5% over the corresponding period in the previous fiscal
year. New subscribers rose just over 36% to 33,523 and net income hit
US$4.8 million.
The company growth was boosted by the acquisition of a 19.92%
interest in Shandong Cord Blood Bank, which gave the group a foothold in
Beijing area and Shandong and Guangdong provinces.
"This is a very exciting time," said Ms. Ting Zheng, China Cord
Blood Corporation's chairperson and chief executive officer. "We
concluded the third quarter with remarkable results with record breaking
new subscribers numbers. The robust performance reflected the team
capabilities to deepen market penetrations in our existing markets in an
effective, efficient and lucrative manner. Leveraging the rising
acceptance of umbilical cord blood banking, China's single child policy
and our dominant market presence, we expect our business will continue
to flourish and we should capture a growing number of new subscribers."
"Also, our Group has made tremendous progress to expand our
geographical reach following the recently announced Shandong
acquisition. By acquiring a 19.92% equity interest and the right of
first refusal, we open the doorway into Shandong province, which has
approximately 1.1 million babies per annum. Together with our local
partner, we will seize this opportunity and deploy our resources and
market expertise to rapidly build out a significant presence in this
affluent region of China. Beijing, Guangdong and Shandong together have a
market size of 2.1 million new born babies per annum."
Marketing expenses as a percentage of revenues climbed to 15.1%
as the company continued to invest in growth. Administrative expenses
also rose, from RMB10.7 million in the first nine months of 2009 to
RMB16.7 million in the corresponding period in fiscal 2010. Operating
margins also deteriorated from 44.6% to 36.4% which was attributed to
increased overheads related to listing in New York and new storage
facilities opened in Beijing.
As of December 31, 2009, the Company had cash and cash
equivalents of RMB386.1 million (US$56.6 million), compared to RMB161.4
million as of March 31, 2009.
Looking ahead, China Core Blood expects to report at least 45,000
new subscribers and total subscribers of at least 129,000 by March 31,
2010.
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