China Cord Blood increases Q1 profits and sales on record new subscriber growth
China Cord Blood (NYSE: CO), a company that collects umbilical cord blood and provides hematopoietic stem cell processing and storage services, has swung to a profit from the first quarter of last year, as it recorded net income of $2.6 million, or $0.04 per share, for the first fiscal quarter of 2011, versus a loss of approximately $0.64 million in the prior year period.
Sales also went up by 23.8% to $10.6 million for the quarter. Processing fees accounted for 79% of total revenue, fueled by growth in new subscribers.
First quarter new subscriber sign-ups grew 17.3% to a record 12,180, exceeding the 12,000 mark for the first time.
The company's total subscriber base as of June 30, 2010 reached 141,492, up almost 50% year-over-year.
In May 2010, the company completed its investment in Qilu Stem Cell Engineering Company Limited, the exclusive cord blood bank operator in the Shandong province, for a near 20% stake, while in July, its interest in Cordlife increased after the completion of the company's rights issue.
China Cord Blood continues to invest in marketing activities and new channels, it said, which it hopes will lead to a more comprehensive sales network and enhance the public awareness of cord blood stem cell storage services.
The company expects the number of new subscribers to exceed 58,000 for fiscal year 2011, which would translate into at least a 30% increase in sales. China Cord also anticipates having a total number of at least 187,000 subscribers at the end of the fiscal year.
As of June 30, 2010, the business had cash of $47.7 million and debt of $6.6 million
China Cord Blood is the first and largest cord blood banking operator in China in terms of geographical coverage.
The company provides cord blood collection, laboratory testing, hematopoietic stem cell processing and stem cell storage services.
Umbilical cord blood is blood that remains in the placenta and in the attached umbilical cord after childbirth. It is collected because it contains stem cells, including hematopoietic cells, which can be used to treat hematopoietic and genetic disorders.
Under current Chinese government regulations, only one licensed cord blood bank operator is permitted to operate in each licensed region and only six licenses have been issued as of today.
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