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Did Global Cord Blood (CO) Catch Your Eye?

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Shares of Global Cord Blood Corp. (CO) are down nearly 37% from their 52-week high of $7.73 recorded on March 1, 2019.

Global Cord Blood is a China-based life sciences enterprise dedicated to the storage of umbilical cord blood stem cells. The Company's businesses include Beijing Municipality Cord Blood Bank, Guangdong Province Cord Blood Bank, Zhejiang Province Cord Blood Bank, the interests in Shandong Province Cord Blood Bank and in cord blood banking operators in other parts of Asia.

The Company has two types of customers - subscribers, who pay processing and storage fees pursuant to the terms of their subscription contracts as consideration for the subscription services, and transplant patients, who pay matching fees via hospitals as consideration for the delivery of donated cord blood units for their operations.

Revenue, net income, and gross profit have significantly increased over the years.
The Company's fiscal year ends in March.

For the fiscal year ending March 31, 2019, net income was RMB 295.2 million and revenue was RMB 986.8 million. This compared with net income of RMB 244.1 million and revenue of RMB 936.8 million in the prior year. Gross profit in fiscal 2019 was RMB 800.7 million, up from RMB 755.3 million in fiscal 2018.

In the second quarter of the fiscal year 2020 ended September 30, 2019, the results of which were announced yesterday, the net income attributable to the Company's shareholders increased by 64.9% to RMB 228.7 million while revenue was up 22% year-over-year to RMB 586.8 million.

Gross profit for the second quarter of the fiscal year 2020 was RMB 265.1 million, an increase of 32.7% over the prior-year quarter.

In July this year, GCBC received a proposal to be acquired by Cordlife Group Limited. Cordlife will issue its ordinary shares at SGD0.5 per share in exchange for all of the outstanding ordinary shares of the company at US$7.50 per share. Upon completion of the proposed transaction, the company's ordinary shares will be delisted from the New York Stock Exchange and the Cordlife ordinary shares will continue to trade on SGX. However, the company cautions its shareholders that no decision has been made regarding the proposal.

The accumulated subscriber base as of September 30, 2019 were 791,8121. Given the fact that Global Cord Blood has a growing client base and improving financials, the stock may be worth a look.

GCBC has traded in a range of $4.14 to $7.73 in the last 1 year. The stock closed Tuesday's trading at $4.88, up 3.17%.

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