China Cord Blood Corporation (NYSE:CO) Q4 2019 Earnings Conference Call - Final Transcript
Jun 19, 2019 • 08:00 am ET
Thank you, sir. We will now begin our question-and-answer session. (Operator Instructions) The first question is from Danny David at Baker Botts. Please go ahead.
Thank you. Last time the Company received a lowball offer, it assembled a Special Committee which took two years to decide to terminate any further evaluation and negotiation of that proposal. In the meantime, the pending offer served only to suppress the price of the stock. Given that the Company has now resurrected the same Special Committee; will the Special Committee move faster this time and reject the offer immediately?
Thank you for the questions. As you are aware, the Special Committee is already formed to evaluate the non-binding offer from Cordlife Group Limited. The members of the committee are all independent non-Executive Directors who have no ties to Cordlife Group whatsoever. Obviously, I think this is for the benefit of the Company as well as for the benefit of the shareholders.
It will be ideal, if any actions or decisions to be made can be made within the relatively short period of time. I think it will be ideal. But at the same time, I think the committee would take a careful approach in evaluating the non-binding offer.
As we stated in our press release, the committee do intend to engage professional parties, including legal counsel, as well as financial adviser to assist in evaluating the nonbinding offer.
Since all the committee members have good experience dealing with similar type of situation in the past, I'm confident that the committee member would take into account the various aspects when reviewing the non-binding offer, including the time constraint or the expectations of the process that you just mentioned.
And I do believe that they will make the appropriate recommendation in the period of time when they deem -- when they think this is -- when they think it is appropriate.
Our next question is from Jeff Neal at Merrill Lynch. Please go ahead.
Good morning. My question is directed towards CEO and Chairperson, Ms. Zheng. Ms. Zheng, you have the dual-hatted responsibility of being CEO, responsible for the management of resources that the Board directs you. And you also have the unique position of Chairperson who has the responsibility of stewarding the Board and the resources of the Company. So in your capacity as Chairperson, I have a question.
This business is remarkably stable. It's consistently profitable. Margins are stable. The Company has no competition within the markets it operates, yet the capital efficiency ratios of the Company are among the worst I look at. And it is the reason the stock is where it is today. The share is closed below the Company's estimated cash value per share yesterday. And there is principally one reason for that, the inefficiency of capital the deployment.
So I'd like Ms. Zheng to enumerate the reasons that the Company maintains this policy with regards to basically capital storage as opposed to capital efficiency for shareholders. And please, I'm not