China Cord Blood Corp (CO): A Steady Growth Outlook Is Not Fully Reflected in This Company’s Share Price

KKR & Co. L.P. (NYSE:KKR) has had success with its Asia-focused buyout fund. Its first fund, $4 billion in size, has produced an annual IRR of 14%. It is in the process of finishing a capital raising exercise of $6 billion for a second Asia fund. Carlyle Group LP (NASDAQ:CG) has not enjoyed the same level of success, as its company overall lost $575 million last year. Carlyle Group LP (NASDAQ:CG)’s earnings dropped 94% last year. Its revenue remained relatively stable in the same time period. KKR & Co. L.P. (NYSE:KKR) has focused on China, which has accounted for 50% of the deals since 2009. Carlyle Group LP (NASDAQ:CG) has had some focus on China too, but maybe, they should increase their emphasis.

Conclusion

Given KKR & Co. L.P. (NYSE:KKR)’s focus on China and what looks like an attractive valuation, there is a chance it increases its stake in China Cord Blood Corp (NYSE:CO), which would benefit holders of the stock. Even if KKR & Co. L.P. (NYSE:KKR) decides to just maintain its current level of ownership, the stock looks attractive. Geographic expansion and a growing market should continue to drive strong revenue and earnings growth. This should translate into a higher share price.

The article A Steady Growth Outlook Is Not Fully Reflected in This Company’s Share Price originally appeared on Fool.com.

Mike is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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