ai171352853475_Jinxin AR2023 Cover V01 28.5mm OP.pdf 1 19/4/2024 下午8:08 Jinxin Fertility Group Limited Jinxin Fertility Group Limited * * （根據開曼群島法律註冊成立的有限公司） (Incorporated under the laws of the Cayman Islands with limited liability) ...

Investment Rating - The report maintains a "Buy" rating for Jinxin Fertility (1951 HK) [3][5] Core Views - Jinxin Fertility achieved robust growth in 2023 with revenue of RMB 2 789 billion (+18 0% YoY) and net profit of RMB 347 million (+194 2% YoY) Adjusted net profit reached RMB 472 million (+72 0% YoY) in line with expectations [2] - The company's core Assisted Reproductive Services (ARS) revenue grew 26 7% YoY to RMB 1 336 billion with success rate improving 0 9 percentage points to 57 5% [3] - Domestic and overseas operations showed steady growth with 30 000 oocyte retrieval cycles completed in 2023 (+16 2% YoY) [3] - The company expanded its Southeast Asia market presence through a strategic partnership with Indonesia's largest fertility group Morula [3] - Profit forecasts for 2024-2026 were revised downward due to overseas business recovery and expense factors with 2024-2026 net profit estimates at RMB 398/462/542 million respectively [3] Business Performance - Revenue breakdown by segment in 2023 [3] - Assisted Reproductive Services (ARS) RMB 1 336 billion (+26 7% YoY) - Management services RMB 566 million (+12 5% YoY) - Auxiliary medical services RMB 209 million (+38 0% YoY) - Obstetrics and pediatrics services RMB 470 million (stable) - Regional performance in 2023 [3] - Chengdu & Greater Bay Area RMB 2 172 billion (+11 9% YoY) 22 000 cycles (+6% YoY) - Yunnan & Wuhan RMB 179 million (+35 8% YoY) 4 261 cycles (+42 7% YoY) - US & Laos RMB 570 million (+23 4% YoY) 3 847 cycles (+11 7% YoY) Financial Projections - Revenue forecasts [4] - 2024E RMB 3 260 billion (+16 88% YoY) - 2025E RMB 3 823 billion (+17 29% YoY) - 2026E RMB 4 541 billion (+18 77% YoY) - Net profit forecasts [4] - 2024E RMB 398 million (+15 41% YoY) - 2025E RMB 462 million (+16 06% YoY) - 2026E RMB 542 million (+17 39% YoY) - EPS forecasts [4] - 2024E RMB 0 14 - 2025E RMB 0 17 - 2026E RMB 0 20 - Valuation multiples [4] - 2024E PE 15x - 2025E PE 13x - 2026E PE 11x Market Data - Current share price HKD 2 44 [5] - Total shares outstanding 2 758 billion [6] - Market capitalization HKD 6 729 billion [6] - 52-week price range HKD 2 05-5 80 [6] - 3-month turnover rate 60 8% [6]

M N 2 Apr 2024 CMB International Global Markets | Equity Research | Company Update Jinxin Fertility (1951 HK) Impressive business rebound in 2023 Target Price HK$4.43 Jinxin Fertility (Jinxin) reported 2023 revenue of RMB2,789mn, up 18.0% YoY. (Previous TP HK$7.35) Non-IFRS adjusted net profit grew substantially by 72.0% YoY to RMB472mn. Up/Downside 82.3% Revenue was in line with our forecast while non-IFRS adjusted net income Current Price HK$2.43 slightly missed our forecast by 5.7%, which was mainly attr ...

Investment Rating - The report maintains a "Buy" rating for the company with a market price of 2.43 HKD [1]. Core Insights - The company achieved a revenue of 2.79 billion HKD in 2023, representing an 18.0% year-over-year growth, and an adjusted net profit of 470 million HKD, which is a 72.0% increase year-over-year [4]. - The core business of Assisted Reproductive Services (ARS) showed a strong recovery, with revenue reaching 1.34 billion HKD, up 26.74% year-over-year [4]. - The company is expected to maintain robust growth, with projected revenues of 3.16 billion HKD, 3.61 billion HKD, and 4.15 billion HKD for 2024, 2025, and 2026, respectively, reflecting growth rates of 13.4%, 14.2%, and 14.8% [5]. Financial Performance Summary - **Revenue and Profitability**: - 2022A: Revenue of 2.36 billion HKD, Net Profit of 121.1 million HKD - 2023A: Revenue of 2.79 billion HKD, Net Profit of 344.7 million HKD - 2024E: Revenue of 3.16 billion HKD, Net Profit of 476.8 million HKD - 2025E: Revenue of 3.61 billion HKD, Net Profit of 557.5 million HKD - 2026E: Revenue of 4.15 billion HKD, Net Profit of 659.1 million HKD [1][4][5]. - **Profitability Ratios**: - Gross Margin: 42.15% in 2023, up 5.2 percentage points year-over-year - Net Margin: 12.44% in 2023, up 7.5 percentage points year-over-year [4]. - **Earnings Per Share (EPS)**: - 2022A: 0.05 HKD - 2023A: 0.12 HKD - 2024E: 0.17 HKD - 2025E: 0.20 HKD - 2026E: 0.24 HKD [1][5]. - **Valuation Metrics**: - P/E Ratio: Expected to decrease from 44.3 in 2022A to 8.9 in 2026E - P/B Ratio: Expected to remain stable around 0.6 to 0.5 from 2023A to 2026E [1][5]. Business Segment Performance - The company’s core ARS business is recovering well, with a significant increase in the number of egg retrieval cycles, totaling 30,368 in 2023, a 16.2% increase year-over-year [4][5]. - The company’s various hospital locations, particularly in Chengdu and the Greater Bay Area, are expected to continue driving revenue growth, with the Chengdu location achieving 2.17 billion HKD in revenue in 2023 [5]. Future Outlook - The company is positioned to become a leading brand in the private assisted reproduction sector, with strong internal growth and expansion potential [5].

Investment Rating - The report maintains an "Outperform" rating for Jinxin Fertility (1951 HK) with a target price of HKD 5.35, indicating an expected upside from the current price of HKD 2.43 [3][7]. Core Insights - The company's performance in 2023 was in line with expectations, achieving a revenue of CNY 2.789 billion, representing an 18.0% increase, driven by the recovery of domestic and international patient numbers and the full-year consolidation of Jiuzhou Hospital and He Wanjia Hospital [7]. - Net profit for 2023 was approximately CNY 347 million, a significant increase of 194.2%, with a net profit margin returning to 12.4% [7]. - The gross margin improved to 42.1%, up by 5.2 percentage points, due to effective cost control and operational efficiency [7]. Summary by Sections Financial Performance - In 2023, revenue breakdown included: - Assisted reproductive services: CNY 1.336 billion (+26.7%) - Management services: CNY 566 million (+12.5%) - Ancillary medical services: CNY 310 million (+36.6%) - Maternal and child business: CNY 577 million (-0.6%) [7]. - The adjusted net profit for 2023 was about CNY 472 million, reflecting a 72.0% increase [7]. Business Developments - The company has established a comprehensive IVF and obstetrics service model, obtaining key licenses for advanced reproductive technologies [7]. - The Hong Kong market for embryo cryopreservation has shown significant growth, with a 145% increase in the number of embryos frozen compared to the previous year [7]. Market Outlook - The report highlights a positive outlook for the Chinese assisted reproductive market, driven by increasing older mothers and supportive fertility policies [7]. - Revenue forecasts for 2024 and 2025 are projected at CNY 3.209 billion and CNY 3.695 billion, respectively, with year-on-year growth of 15.1% [7].

医药生物/医疗服务 公 司 2023 年业绩快速恢复，深圳新院区有望 2025 年投入 研 锦欣生殖（01951.HK） 究 2024年04月01日 运营 ——港股公司信息更新报告 投资评级：买入（维持） 余汝意（分析师） 阮帅（联系人） yuruyi@kysec.cn ruanshuai@kysec.cn 日期 2024/3/28 证 书编号：S0790523070002 证书编号：S0790124010004 港 当前股价(港元) 2.430  2023年业绩快速恢复，盈利能力持续提升，维持“买入”评级 股 一年最高最低(港元) 5.800/2.050 公司发布2023年报，2023年公司实现收入27.89亿元（同比+18%，以下均为同 公 司 总市值(亿港元) 67.01 比口径），经调整净利润4.71亿元（+72%），毛利率42.1%（+5.17pct），经调整 信 流通市值(亿港元) 67.01 净利率16.9%（+5.31pct）。考虑2023年并购市场估值较高，我们下调2024-2025 息 总股本(亿股) 27.58 年并新增2026年盈利预测，预计2024-2026年归母净利润为3.87/ ...

Investment Rating - The report maintains a "Buy" recommendation for Jinxin Fertility (1951.HK) with a current stock price of HKD 2.43 [2][4][7]. Core Views - The company achieved a revenue of CNY 2.789 billion in 2023, representing an 18.0% year-on-year growth, and a net profit of CNY 347 million, which is a significant increase of 194.2% [4][10]. - The number of IVF cycles performed increased to 30,368 in 2023, a growth of 16.2% year-on-year, indicating stable growth across various regions [4][7]. - The company is expected to benefit from the inclusion of 16 assisted reproductive technology projects into the basic medical insurance coverage in Beijing, enhancing service accessibility and driving industry growth [4][7]. Summary by Sections Financial Performance - Revenue for 2023 was CNY 2.789 billion, with a gross profit margin of 42.1% and a net profit margin of 12.4% [10][11]. - The adjusted net profit for 2023 was CNY 472 million, reflecting a 72.0% increase [4][10]. - Forecasts for 2024-2026 project revenues of CNY 3.397 billion, CNY 4.207 billion, and CNY 5.262 billion respectively, with net profits expected to reach CNY 423 million, CNY 526 million, and CNY 659 million [5][12]. Operational Insights - The company operates in multiple regions including Sichuan, Shenzhen, Wuhan, California, and Laos, positioning itself as a leading player in the assisted reproductive services industry [7][11]. - The profitability of mature institutions contributed CNY 590 million in 2023, a 28.2% increase year-on-year, while overseas institutions turned a profit of CNY 27 million after previously incurring losses [4][7]. Market Trends - The assisted reproductive industry is experiencing rapid growth, with increasing demand and supportive government policies enhancing service accessibility [7][11]. - The report highlights the potential for further growth as more regions are expected to follow suit in including assisted reproductive services in their medical insurance plans [4][7].

Core Viewpoint - The demand for assisted reproduction is not simply correlated with birth rates, indicating that investors should consider broader factors when evaluating the investment potential of the assisted reproduction industry [1][3]. Industry Analysis - The assisted reproduction industry is positioned as a high-growth sector that balances social and economic value, especially in light of national policies aimed at addressing population issues [1][3]. - The decline in birth rates is attributed to both a desire not to have children and an inability to conceive, with various social factors contributing to these trends [1][3]. - Recent policies, such as the inclusion of 16 assisted reproduction treatment projects in Beijing's medical insurance coverage, aim to reduce costs and improve accessibility to assisted reproduction services [3][5]. Market Potential - The assisted reproduction market in China has significant growth potential, with a projected 1.5 times increase by 2030, as current penetration rates are still in the single digits compared to over 30% in developed countries [5][6]. - The number of couples experiencing infertility is expected to rise, with the infertility rate projected to increase from 16% in 2018 to 19.6% by 2027 [6]. Company Performance - The company, Jinxin Reproductive, has shown strong financial performance, with a revenue increase of 18% from 2.364 billion RMB in 2022 to 2.789 billion RMB in 2023 [8]. - The core revenue source, IVF and related services, accounted for 78% of total revenue in 2023, with a year-on-year growth of 24.4% [7][8]. - The company has a competitive edge due to its high success rate of 57.5% in its headquarters, which is significantly above the national average of 48% [7][13]. Growth Strategy - The company is expanding its business through both organic growth and acquisitions, enhancing its service offerings in obstetrics, pediatrics, and gynecology [16]. - The company has established a presence in both domestic and international markets, with successful operations in regions like the U.S. and Laos, which have shown profitability shortly after opening [9][15]. - Future growth is expected from increased penetration of high-value services and the expansion of its IVF offerings, particularly in mature markets like Shenzhen and Chengdu [16]. Investment Outlook - The current valuation of Jinxin Reproductive is considered low compared to historical levels and peers, suggesting a potential for significant upside as market conditions improve [18]. - Analysts predict a target price of 5.66 RMB for the company, indicating a potential upside of 135.81% from current levels [18].

Financial Performance - The group's revenue for the year ended December 31, 2023, was approximately RMB 2,788.9 million, an increase of 18.0% compared to RMB 2,364.5 million for the year ended December 31, 2022[2]. - The group's net profit for the year ended December 31, 2023, was approximately RMB 347.0 million, representing a significant increase of 194.2% from RMB 117.9 million for the year ended December 31, 2022[2]. - The adjusted net profit under non-IFRS was approximately RMB 471.5 million, up 72.0% from RMB 274.1 million in the previous year[2]. - The non-IFRS EBITDA for the year ended December 31, 2023, was approximately RMB 706.1 million, an increase of 92.4% from RMB 367.0 million for the year ended December 31, 2022[2]. - The adjusted EBITDA under non-IFRS was approximately RMB 781.2 million, reflecting a 63.1% increase from RMB 479.1 million in the previous year[2]. - Basic earnings per share for the year ended December 31, 2023, were RMB 0.13, while the adjusted basic earnings per share under non-IFRS were RMB 0.18[2]. - The gross profit for the year was RMB 1,175.4 million, compared to RMB 874.3 million in the previous year[6]. - The total comprehensive income for the year was RMB 402.0 million, compared to RMB 447.6 million in the previous year[8]. - Pre-tax profit for 2023 was RMB 464,269,000, a substantial increase from RMB 154,324,000 in 2022, reflecting a growth of 201.5%[39]. - The group's income tax expense rose by 222.4% from approximately RMB 36.4 million for the year ended December 31, 2022, to approximately RMB 117.3 million for the year ended December 31, 2023, driven by increased pre-tax profits and improved operational efficiency[100]. Assets and Liabilities - Total assets decreased from RMB 13,328,163 thousand in 2022 to RMB 13,553,729 thousand in 2023, representing an increase of approximately 1.68%[9]. - Non-current assets increased from RMB 10,186,812 thousand in 2022 to RMB 10,091,423 thousand in 2023, reflecting a growth of about 5.16%[10]. - Current liabilities decreased significantly from RMB 2,763,971 thousand in 2022 to RMB 1,689,833 thousand in 2023, a reduction of approximately 38.93%[10]. - The total liabilities decreased from RMB 3,900,688,000 in 2022 to RMB 2,665,435,000 in 2023, indicating a reduction of approximately 31.6%[22]. - The company's net asset value increased from RMB 8,735,128 thousand in 2022 to RMB 10,186,812 thousand in 2023, marking a growth of around 16.56%[10]. - The total equity attributable to owners of the company increased from RMB 8,639,743 thousand in 2022 to RMB 10,091,423 thousand in 2023, reflecting an increase of approximately 16.83%[10]. - The company’s bank borrowings decreased from RMB 2,070,678 thousand in 2022 to RMB 1,379,664 thousand in 2023, a reduction of about 33.43%[10]. - The total current liabilities of accounts payable and other payables decreased to RMB 805,083,000 in 2023 from RMB 916,929,000 in 2022, a reduction of 12.1%[52]. Revenue Breakdown - Total revenue for the year ended December 31, 2023, was RMB 2,788,910,000, with RMB 2,218,608,000 from Greater China and RMB 570,302,000 from overseas[20]. - Revenue from assisted reproductive services increased to RMB 1,335,511,000 in 2023, up from RMB 1,053,776,000 in 2022, representing a growth of approximately 26.7%[28]. - Revenue from the US business increased by 22.7% from approximately RMB 462.4 million for the year ended December 31, 2022, to approximately RMB 567.5 million for the year ended December 31, 2023[90]. - Revenue from Chengdu business increased by 6.2% from approximately RMB 1,384.9 million for the year ended December 31, 2022, to approximately RMB 1,471 million for the year ended December 31, 2023[85]. - Revenue from Shenzhen business rose by 16.9% from approximately RMB 348.3 million for the year ended December 31, 2022, to approximately RMB 407.3 million for the year ended December 31, 2023[86]. - Wuhan business revenue surged by 124.6% from approximately RMB 17.0 million for the year ended December 31, 2022, to approximately RMB 38.2 million for the year ended December 31, 2023[87]. - Revenue from Kunming business increased by 154.8% from approximately RMB 92.4 million for the year ended December 31, 2022, to approximately RMB 235.5 million for the year ended December 31, 2023[88]. - Revenue from Hong Kong business grew by 12.3% from approximately RMB 59.5 million for the year ended December 31, 2022, to approximately RMB 66.8 million for the year ended December 31, 2023[89]. Operational Developments - The company has restructured its internal reporting framework, resulting in changes to its reportable segments, now classified as Greater China and overseas operations[19]. - The company’s overseas business has been rapidly developing, prompting management to designate two operational segments for better resource allocation and performance assessment[19]. - The company aims to create a comprehensive service model integrating IVF and obstetrics, enhancing operational efficiency and reducing costs[60]. - The company has implemented a digital platform and proprietary customer relationship management system across its medical facilities, improving patient management and appointment processes[57]. - The company is focusing on expanding its services to cover the entire life cycle of women's and children's health management[60]. - The company has successfully registered medical devices and drugs with the National Medical Products Administration, showcasing its high-quality clinical results and R&D capabilities[60]. - The company aims to expand its service offerings to include comprehensive fertility services and enhance synergies between assisted reproduction and maternal-child health services[71]. - The company has established partnerships with several universities to improve patient care and medical services, including collaborations with Hong Kong Chinese University and USC Keck School of Medicine[76]. Employee and Governance - The group has a total of 3,231 employees as of December 31, 2023, with employee costs amounting to approximately RMB 778.9 million, an increase from RMB 674.9 million in the previous year[123]. - The board has proposed a final dividend of HKD 0.0595 per share for the year ended December 31, 2023, compared to zero for the previous year[125]. - The group has established an audit and risk management committee to assist the board in monitoring compliance with applicable laws and regulations[129]. - The group has adopted corporate governance codes to enhance accountability and protect shareholder interests[127]. Future Outlook - The company anticipates a recovery in business growth in 2024, driven by strong demand for assisted reproductive technologies and supportive government policies[67]. - The overall market penetration of ARS in China remains relatively low compared to approximately 30% in Europe and the US, indicating significant growth potential[67]. - The company is actively seeking opportunities to expand its business network through acquisitions in high-growth potential markets in China and recruiting new doctors in the US, particularly in the West[74].

Financial Performance - Revenue for the first half of 2023 reached RMB 1,333,906 thousand, representing a 17.2% increase compared to RMB 1,138,228 thousand in the same period of 2022[10]. - Gross profit increased by 21.5% to RMB 564,324 thousand, up from RMB 464,304 thousand year-on-year[10]. - The company reported a profit before tax of RMB 278,535 thousand, a 19.2% increase from RMB 233,660 thousand in the previous year[10]. - Net profit for the period was RMB 223,801 thousand, reflecting a 19.3% growth compared to RMB 187,597 thousand in the first half of 2022[10]. - The gross profit margin improved to 42.3% from 40.8% year-on-year, while the net profit margin increased to 16.8% from 16.5%[10]. - The company's net profit increased by 19.3% from approximately RMB 187.6 million for the six months ended June 30, 2022, to approximately RMB 223.8 million for the six months ended June 30, 2023[55]. - The net profit margin for the six months ended June 30, 2023, was 16.8%, up from 16.5% for the same period in 2022, attributed to increased demand from global patients and improved operational efficiency[55]. Assets and Liabilities - Total assets as of June 30, 2023, were RMB 15,230,368 thousand, showing a slight decrease of 0.01% from RMB 15,232,037 thousand at the end of 2022[10]. - Total equity increased by 16.6% to RMB 10,187,083 thousand, up from RMB 8,735,128 thousand at the end of 2022[10]. - Total liabilities decreased significantly by 22.4% to RMB 5,043,285 thousand, down from RMB 6,496,909 thousand[10]. - The company's total assets as of June 30, 2023, were RMB 13,687,634 thousand, an increase from RMB 13,328,163 thousand at the end of 2022[136]. - The total liabilities decreased from RMB 2,763,971 thousand at the end of 2022 to RMB 1,626,056 thousand as of June 30, 2023, reflecting a reduction of approximately 41.2%[137]. Market Expansion and Strategy - The company aims to expand its hospital network to enhance access to quality Assisted Reproductive Services (ARS) in China and the US[6]. - The company has made multiple acquisitions in 2021 and the first half of 2023 to capitalize on the growing demand for ARS in China[6]. - The company has expanded its capacity in existing hospitals, leveraging industry development potential, and has established a dual referral network with 111 medical institutions across 23 cities in China, an increase of 16% compared to the same period in 2022[14]. - The company plans to expand its business network through acquisitions in high-growth markets in China, focusing on first-tier cities and cities with radiation capabilities[26]. - The company is actively exploring acquisition opportunities in Southeast Asia, recognizing significant growth potential in the ARS sector[26]. Research and Development - The company has made significant investments in R&D teams and activities to promote clinical advancements and improve service quality[11]. - The company published 20 SCI journal articles and 8 core journal articles, and obtained 19 scientific research projects, along with 5 patents[28]. - Research and development expenses rose by 124.8% from approximately RMB 4.7 million to approximately RMB 10.6 million, reflecting increased investment in reproductive technology[47]. Patient Services and Satisfaction - Patient satisfaction at Sichuan Jinxin Xinan Hospital (Bisheng District) increased from 92.9% to 95.8% in the first half of 2023, enhancing the hospital's reputation in the ARS market[14]. - The company has successfully launched three specialized service packages to meet diverse patient needs, focusing on personalized ARS treatment plans[14]. - The company has expanded its service offerings to cover the entire fertility cycle, including pre-pregnancy, IVF, prenatal, delivery, and postnatal services[11]. Financial Management - Cash generated from operating activities for the six months ended June 30, 2023, was RMB 336.8 million, compared to RMB 273.0 million for the same period in 2022[62]. - The company's cash and cash equivalents at the end of June 30, 2023, were approximately RMB 770.1 million, down from RMB 1,178.8 million at the end of June 30, 2022[62]. - The company completed a placement of 175 million shares at a price of HKD 6.725 per share, raising approximately RMB 999.1 million in net proceeds[61]. - The company has unutilized financing from bank agreements amounting to RMB 719,276,000 as of June 30, 2023, which supports its liquidity position[145]. - The company anticipates sufficient liquidity to meet its financial obligations for at least the next twelve months from June 30, 2023[145]. Shareholder Information - The company granted 65,853,241 restricted shares under the 2022 Restricted Share Award Scheme, with 57,170,247 shares awarded to key management and directors on August 23, 2023[92]. - The total number of issued shares as of June 30, 2023, is 2,720,913,796[100]. - The company has no significant events affecting its operations reported after June 30, 2023[92]. Regulatory and Compliance - The group maintained compliance with all applicable corporate governance codes during the reporting period[72]. - There were no significant contingent liabilities or guarantees as of June 30, 2023[66]. - The company has been exempt from tax under Cayman Islands law and has subsidiaries in the British Virgin Islands that are also exempt from tax[162].