Why Cordlife Group is unfazed by AsiaMedic/Cryoviva cord blood JV

Its latest AABB accreditation is proof it can compete.

Maybank Kim Eng says its recently concluded Corporate-In-Your-Office concall in Singapore drew the participation of seven institutional fund managers and stimulating questions. CEO of Cordlife, Jeremy Yee, provided more clarity on his strategies to fend off competition and future growth direction in terms of product diversification and market expansion.

Here's more from Maybank Kim Eng:

Mr Yee highlighted Cordlife’s achievement in growing from 20% market share in 2000 to 72% today as an example of their ability to compete. To deter competition, one way is for Cordlife to tie up exclusively with key hospitals and leverage upon its solid financial strength against AsiaMedic and Cryoviva.

Mr Yee emphasized that the cord blood industry is all about quality and customer confidence where new players will not be easily accepted by the public due to business continuity concerns. Customers would be better served storing their cord blood in the public blood bank than with unproven providers.

Further, he revealed that even the largest player in India, LifeCell, originally had plans to expand to Singapore but aborted after registering a company due to second thoughts over Cordlife’s strong market position.

He concludes that Cryoviva, which is linked to Cryobank (No 3 player after Cordlife in India) via a common shareholder, will not pose a threat to Cordlife. In fact, he is taking the fight to them, having just gotten AABB accreditation for his Indian subsidiary (just announced).

Product expansion. Cordlife will position itself solely as a “maternal and infant” healthcare products provider to leverage on its existing large customer base, strong connections with doctors and experienced sales teams.

Mr Yee revealed that Cordlife is exploring two new products to add to its product portfolio of cord blood and cord tissue banking.

Overseas expansion. Cordlife is also constantly looking for opportunities to expand into nearby countries. Mr Yee highlighted its experience in establishing a strong presence successfully in the two most challenging countries for cord blood banking, China and India. “No earning dilution in the first year of expansion” is Cordlife’s key criteria in any overseas expansion.