Shares in Cordlife Group Ltd (SGX: P8A) surged 11.7% for the week to end Friday at S$0.575. The astronomical rise pales in comparison with that of the broader Singapore market; the Straits Times Index (SGX: ^STI) inched down by 0.3% during the same time frame. This makes Cordlife the Singapore “Flyer” of the week.
Cordlife is a pioneer in private cord blood banking in Asia. It is also involved in medical diagnostics services such as non-invasive newborn metabolic screening and family genetic testing.
On Wednesday, Cordlife’s shares zoomed up 16.5%, from S$0.515 to S$0.60. That promoted the Singapore stock market regulator to issue a query. It asked if Cordlife knew of any possible explanation for the unusual price movements and whether the company could confirm it complies with the listing rules.
In response, the next day, Cordlife said that on 4 June, it announced that it had made a proposal to Global Cord Blood Corp (NYSE: CO), a company listed in the US, for a statutory merger between the two companies.
It also added that on 10 July, there were three separate married deals, which are off-market transactions. Cordlife received and released the substantial shareholders’ notifications in respect of the second and third trade. It did not receive any information with regards to the first trade.
In a separate filing, Cordlife disclosed the details about the second and third married trades. The company’s major shareholders, Hon Kwok Lung and his wife Lam Suk Ying, have increased their combined stake in Cordlife from 21.52% to 28.17%. They bought 16.88 million Cordlife shares in two separate tranches for S$10.13 million, which works out to S$0.60 per share. Hon is the chairman of Hong Kong-listed Citychamp Watch & Jewellery Group Ltd (HKG: 0256).
The unidentified first trade was for 16.88 million shares at S$0.525 each.
At Cordlife’s share price of S$0.575, it is going at a price-to-earnings ratio of around 35, way higher than the valuation of the Straits Times Index.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.