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].

Financial Performance - The group's revenue for the six months ended June 30, 2023, was approximately RMB 1,333.9 million, an increase of 17.2% compared to RMB 1,138.2 million for the same period in 2022[2]. - The group's net profit for the six months ended June 30, 2023, was approximately RMB 223.6 million, representing a 19.3% increase from RMB 190.1 million for the same period in 2022[2]. - The adjusted net profit under non-IFRS was approximately RMB 254.8 million for the six months ended June 30, 2023, a decrease of 2.3% compared to RMB 260.7 million for the same period in 2022[2]. - The group's EBITDA for the six months ended June 30, 2023, was approximately RMB 394.1 million, an increase of 16.3% from RMB 333.5 million for the same period in 2022[2]. - Basic earnings per share for the six months ended June 30, 2023, were RMB 0.08, while the adjusted basic earnings per share were RMB 0.10[3]. - Total comprehensive income for the period reached RMB 446,601,000, an increase from RMB 389,433,000 in the same period last year, representing a growth of approximately 14.7%[7]. - The profit from segments for the six months ended June 30, 2023, was RMB 337,842,000, compared to RMB 263,601,000 for the same period in 2022, indicating an increase of about 28.2%[17]. - The group reported a pre-tax profit of RMB 278.5 million for the six months ended June 30, 2023, compared to RMB 233.7 million for the same period in 2022[6]. Expenses and Costs - Research and development expenses for the six months ended June 30, 2023, were RMB 10.6 million, compared to RMB 4.7 million for the same period in 2022[6]. - Administrative expenses for the six months ended June 30, 2023, were RMB 188.1 million, slightly increasing from RMB 187.6 million for the same period in 2022[6]. - Total financial costs for the six months ended June 30, 2023, were RMB 42,650 thousand, up from RMB 32,994 thousand in the same period in 2022, representing an increase of approximately 29.2%[24]. - Sales and distribution expenses increased by 62.5% from approximately RMB 53.7 million to approximately RMB 87.2 million, largely due to the consolidation of the Kunming business[79]. - Financial costs increased by 29.3% from approximately RMB 33.0 million to approximately RMB 42.7 million, primarily due to interest from a syndicated loan of USD 300 million[81]. Assets and Liabilities - Non-current assets totaled RMB 13,687,634,000 as of June 30, 2023, up from RMB 13,328,163,000 at the end of 2022, reflecting an increase of about 2.7%[8]. - Current liabilities decreased to RMB 1,626,056,000 from RMB 2,763,971,000, showing a reduction of approximately 41.2%[9]. - The total liabilities decreased to RMB 3,417,229,000 from RMB 3,732,938,000, reflecting a decrease of about 8.4%[9]. - The company's cash and cash equivalents decreased to RMB 761,064,000 from RMB 1,316,549,000, a decline of approximately 42.2%[8]. - The company’s current liabilities for accounts payable and other payables totaled RMB 844,199,000, down from RMB 916,929,000 as of December 31, 2022, a decrease of 7.9%[36]. Revenue Sources - The group's revenue from external customers was RMB 1,333,906,000, an increase from RMB 1,138,228,000 for the same period in 2022, representing a growth of approximately 17.2%[16]. - Revenue from assisted reproductive services reached RMB 638,702 thousand, up from RMB 518,635 thousand, indicating a growth of about 23.1% year-over-year[21]. - Revenue from Chengdu operations decreased by 2.0% to approximately RMB 687.4 million, primarily due to a reduction in management service fees charged to the Jinjiang Reproductive Center[65]. - Revenue from Shenzhen operations increased by 13.8% to approximately RMB 188.4 million, driven by an increase in IVF treatment cycles post-pandemic[69]. - Revenue from Wuhan operations surged by 152.0% to approximately RMB 16.6 million, attributed to the resumption of ARS services[70]. Strategic Initiatives - The company has been focusing on enhancing its assisted reproductive services (ARS) to improve treatment success rates and patient experience, thereby strengthening its market position[41]. - The company aims to leverage its strengths in ARS to expand full-cycle fertility services, including pre-pregnancy, IVF, prenatal, delivery, and postnatal care[41]. - The company has made significant investments in R&D to improve clinical translation and enhance clinical standards in its services[41]. - The company is actively pursuing information-driven smart hospital construction to enhance patient convenience and operational management[41]. - The company has established partnerships with several renowned universities to enhance research and training in reproductive medicine[59]. Market Outlook - The company anticipates a recovery in business in 2023, driven by strong demand for assisted reproductive technology (ART) and services, particularly in the Chinese market where the penetration rate remains relatively low compared to approximately 30% in Europe and the U.S.[51]. - The Chinese government has implemented various policies to encourage childbirth, allowing couples to have up to three children, which is expected to significantly increase the penetration rate and market size for ART in China[52]. - HRC Medical has increased its ownership in Jiuzhou Hospital and Huanjia Hospital in Yunnan Province to approximately 96.50%, positioning these hospitals as the second largest in the province by market share and the largest among private hospitals[53]. Shareholder Information - The company did not recommend the payment of an interim dividend for the six months ended June 30, 2023[3]. - The company has granted a total of 57,170,247 restricted shares under the 2022 Restricted Share Incentive Plan as of the announcement date[60]. - The company has not purchased, sold, or redeemed any of its listed securities during the reporting period[120]. - The audit and risk management committee has reviewed the company's accounting principles and internal controls, ensuring compliance with applicable laws and regulations[121].

Market Position and Expansion - The group ranked third in the Chinese ARS market in 2018, conducting 20,958 IVF cycles, capturing approximately 3.1% of the total market share[5]. - The group expanded its service range by acquiring Jin Xin Women's and Children's Hospital and other facilities, enhancing its presence in Sichuan and the Greater Bay Area[6]. - The group completed the acquisition of Jiuzhou Hospital and Huanjia Hospital, expanding its market share and influence in Southwest China[6]. - The group anticipates significant growth in the Chinese assisted reproductive services market due to government policies encouraging childbirth, allowing couples to have up to three children[8]. - The company plans to focus on business expansion in the U.S. and Greater Bay Area, as well as Southeast Asia, to enhance its market share in assisted reproductive services[19]. - The company aims to leverage strategic acquisitions to solidify its leading position in the assisted reproductive industry[19]. - The company plans to expand its business network through acquisitions in high-growth potential markets, focusing on first-tier cities in China[41]. - The company is actively pursuing acquisition opportunities in Southeast Asia, recognizing significant growth potential in the assisted reproductive sector[43]. Financial Performance - In 2022, the company achieved total revenue of RMB 2.364 billion, representing a year-on-year growth of 28.6%[17]. - The group's revenue increased by 28.6% from approximately RMB 1,838.8 million for the year ended December 31, 2021, to approximately RMB 2,364.5 million for the year ended December 31, 2022[51]. - Revenue from the Chengdu business rose by 57.2% from approximately RMB 881 million to approximately RMB 1,384.9 million, primarily due to the integration of Jinxin Women and Children's Hospital[55]. - Revenue from the Shenzhen business decreased by 18.4% from approximately RMB 426.9 million to approximately RMB 348.3 million, mainly due to the impact of COVID-19[56]. - The company's net profit decreased by 66.7% from approximately RMB 353.7 million for the year ended December 31, 2021, to approximately RMB 117.9 million for the year ended December 31, 2022, with a net profit margin of 5% compared to 19.2% in the previous year[76]. - The gross profit margin for 2022 was 37.0%, down from 42.0% in 2021, indicating pressure on profitability[14]. - The cost of revenue rose by 39.6% from approximately RMB 1,067.3 million to approximately RMB 1,490.2 million, mainly due to the integration of additional hospitals[61]. Operational Developments - The group increased its control over Shenzhen Zhongshan Hospital from 79.44% to 99.90% in 2022, further integrating its ARS and obstetrics and gynecology services[6]. - The group has undergone internal restructuring to expand its service scope and comply with applicable Chinese laws regarding genetic services[6]. - The company has implemented a series of strategic measures to strengthen its operational resilience and risk management capabilities post-pandemic[17]. - The company aims to enhance its competitiveness by adding molecular genetic services, including prenatal testing, to its offerings[6]. - The company has established a research center in the Greater Bay Area to enhance clinical research and innovation, aiming to improve clinical quality and competitiveness[44]. Research and Development - The number of published SCI journal papers from the Shenzhen Innovation Center reached 18 in 2022, with a cumulative total exceeding 100 papers by the end of the year[28]. - Research and development expenses increased by 64.1% from approximately RMB 10.7 million to approximately RMB 17.5 million, attributed to an increase in the number of R&D personnel and costs of materials and equipment[65]. - The company has established a strong research and innovation platform, led by Ms. Liu Hongkun, who oversees investment and merger activities[117]. Customer Engagement and Satisfaction - Patient satisfaction for transplant patients at Chengdu Xinan Hospital improved to 93.6% in 2022, up 0.6% from 2021[23]. - The "Jinxin Member" service platform has accumulated 39,641 members as of December 31, 2022, facilitating digital appointment and consultation processes[49]. - The company aims to enhance its digital platform to improve customer engagement and streamline service delivery[106]. Leadership and Governance - The company has a strong leadership team with extensive experience in the medical field, including Mr. Duan Tao, who has 30 years of experience in the healthcare industry[117]. - The board of directors includes five executive directors and four independent non-executive directors, with specific terms for re-election at the annual general meeting[146][147]. - The company has established a remuneration committee to review the remuneration policies for all directors and senior management[153]. Future Outlook - Future outlook includes expansion plans in the Asia-Pacific region, targeting a 20% increase in market share over the next three years[106]. - The company has set a revenue growth target of 25% for the upcoming fiscal year, driven by increased demand for fertility services[107]. - The company plans to enhance ESG initiatives, focusing on creating social value and improving healthcare accessibility through charitable efforts and green operations[50].

Financial Performance - The group's revenue for the year ended December 31, 2022, was approximately RMB 2,364.5 million, an increase of 28.6% compared to RMB 1,838.8 million for the year ended December 31, 2021[2]. - The group's net profit for the year ended December 31, 2022, was approximately RMB 117.9 million, a decrease of 66.7% from RMB 353.7 million for the year ended December 31, 2021[2]. - The adjusted net profit under non-IFRS was approximately RMB 274.1 million, down 39.8% from RMB 455.3 million for the previous year[2]. - The non-IFRS EBITDA for the year ended December 31, 2022, was approximately RMB 367 million, a decrease of 33.1% from RMB 548.5 million for the year ended December 31, 2021[2]. - The adjusted non-IFRS EBITDA was approximately RMB 479.1 million, down 23% from RMB 622.5 million for the previous year[2]. - Basic earnings per share for the year ended December 31, 2022, were RMB 0.05, compared to RMB 0.14 for the previous year[8]. - The board did not recommend a final dividend for the year ended December 31, 2022, compared to a dividend of HKD 0.0738 per share for the previous year[2]. - The total comprehensive income for the year ended December 31, 2022, was RMB 447.6 million, compared to RMB 196.9 million for the previous year[8]. Assets and Liabilities - Non-current assets increased to RMB 13,328,163 thousand in 2022 from RMB 10,282,258 thousand in 2021, representing a growth of approximately 29.9%[9]. - Current liabilities rose significantly to RMB 2,763,971 thousand in 2022, compared to RMB 1,071,522 thousand in 2021, marking an increase of about 157.5%[10]. - The company's total assets minus current liabilities amounted to RMB 12,468,066 thousand in 2022, up from RMB 11,753,868 thousand in 2021, indicating a growth of approximately 6.1%[10]. - The net asset value stood at RMB 8,735,128 thousand in 2022, slightly down from RMB 8,752,701 thousand in 2021, reflecting a decrease of about 0.2%[10]. - The company reported a significant increase in accounts payable and other payables, which reached RMB 916,929 thousand in 2022, compared to RMB 445,518 thousand in 2021, an increase of approximately 106.5%[10]. - The goodwill increased to RMB 3,484,725 thousand in 2022 from RMB 2,719,747 thousand in 2021, representing a growth of about 28.1%[9]. - Deferred tax assets rose to RMB 88,516 thousand in 2022, compared to RMB 7,020 thousand in 2021, indicating a substantial increase of approximately 1,125.4%[9]. - The company’s cash and cash equivalents increased to RMB 1,316,549 thousand in 2022 from RMB 862,325 thousand in 2021, reflecting a growth of approximately 52.7%[9]. Operational Highlights - The company continues to focus on expanding its assisted reproductive services and related healthcare offerings, aiming for further market penetration and growth in the coming years[11]. - The group's revenue for the year ended December 31, 2022, primarily came from operations in Chengdu, Shenzhen, Wuhan, Kunming, the United States, and Hong Kong[20]. - The acquisition of a new business in Kunming was completed during the year ended December 31, 2022[20]. - The group reported its operating segments based on geographical areas, specifically Greater China and the United States[20]. - The company reported a pre-tax profit of RMB 154,324 thousand for the current year, compared to RMB 457,927 thousand in the previous year[21][22]. - The company recorded a loss of RMB 34,543 thousand from the sale of property, plant, and equipment[25]. - The company’s administrative expenses included share-based compensation of RMB 87,437 thousand[21]. - The company reported a fair value change loss of RMB 76,733 thousand on preferred stock investments[21]. Research and Development - Research and development expenses for the year were RMB 17.5 million, an increase from RMB 10.7 million in the previous year[6]. - The company has increased investment in R&D to enhance clinical transformation and improve clinical standards[59]. - The company published a total of 106 scientific papers in 2022, including 38 in core journals, and obtained 35 scientific research projects[79]. - The company established the Jinxin Medical Innovation Research Center in January 2022 to enhance research management and clinical application[79]. Market Expansion and Strategy - The company aims to leverage the growth potential in the Greater Bay Area, aligning with national strategies to enhance market share[74]. - The company is actively seeking acquisition opportunities in Southeast Asia, believing in significant growth potential in the assisted reproduction sector[78]. - The company plans to continue its expansion in the Chinese market, leveraging its established network of hospitals and clinics[141]. - The company aims to strengthen clinical research and its transformation into clinical applications to enhance competitiveness and create new business growth points[79]. Governance and Compliance - The group has maintained compliance with all applicable corporate governance codes throughout the year ended December 31, 2022[123]. - The company is focused on enhancing its governance and risk management practices as part of its corporate governance code compliance[139]. Employee and Operational Metrics - As of December 31, 2022, the group employed a total of 3,158 employees, with 2,761 in China and 397 in the United States[120]. - Employee costs for the year ended December 31, 2022, amounted to approximately RMB 674.9 million, compared to RMB 457.9 million for the year ended December 31, 2021, representing a year-over-year increase of 47.5%[120]. - The company provided training courses in assisted reproductive technology to 1,378 clinical staff during the year ended December 31, 2022[80]. Future Outlook - The company aims to expand its service range to provide comprehensive fertility services covering pre-pregnancy, IVF, prenatal, delivery, and postnatal care[76]. - The company plans to renovate Jiuzhou Hospital in the first half of 2023 to optimize service environment and expand capacity[75].

Financial Performance - Revenue for the first half of 2022 reached RMB 1,138,228 thousand, representing a 32.5% increase from RMB 859,303 thousand in 2021[7] - Gross profit for the same period was RMB 464,304 thousand, up 27.8% from RMB 363,242 thousand in 2021[7] - Net profit increased by 15.4% to RMB 187,597 thousand compared to RMB 162,631 thousand in the previous year[7] - The adjusted net profit for the first half of 2022 was RMB 258,158 thousand, reflecting a 13.2% increase from RMB 228,116 thousand in 2021[7] - In the first half of 2022, the company's revenue increased by 32.5% year-on-year, and net profit attributable to shareholders grew by 22.2% compared to the same period in 2021[9] - The group's net profit increased by 15.4% from approximately RMB 162.6 million for the six months ended June 30, 2021, to approximately RMB 187.6 million for the six months ended June 30, 2022[42] - The adjusted net profit under non-IFRS increased by 13.2% from approximately RMB 228.1 million to approximately RMB 258.2 million, with an adjusted net profit margin of 22.7% for the six months ended June 30, 2022, down from 26.5%[42] - Basic and diluted earnings per share for the six months ended June 30, 2022, were RMB 0.08 and RMB 0.07, respectively, compared to RMB 0.06 for both in the previous period[45] Assets and Liabilities - Total assets as of June 30, 2022, were RMB 15,084,563 thousand, a 17.6% increase from RMB 12,825,390 thousand at the end of 2021[7] - The total liabilities rose significantly by 56.2% to RMB 6,361,586 thousand from RMB 4,072,689 thousand in 2021[7] - The group's capital structure as of June 30, 2022, was 42.2% debt and 57.8% equity, compared to 31.8% debt and 68.2% equity as of December 31, 2021[49] - As of June 30, 2022, the group had bank borrowings of RMB 2,135.2 million, a significant increase from RMB 163.7 million as of December 31, 2021[54] - The company's total assets less current liabilities stood at RMB 12,338,214 thousand, up from RMB 11,753,868 thousand, reflecting an increase of approximately 5%[95] Market Expansion and Strategy - The company aims to expand its business network to provide high-quality Assisted Reproductive Services (ARS) to a broader population[4] - The company has established a comprehensive fertility service strategy to capitalize on the increasing demand for ARS in China due to supportive government policies[4] - The company is focused on integrating its ARS and obstetrics and gynecology services to create synergies and enhance control over its operations[4] - The company aims to expand its network of high-quality reproductive services to strengthen its leading position in the ARS market in both China and the US[15] - The company is expanding its integrated fertility services, including pre-pregnancy, IVF, prenatal care, delivery, postpartum, and child services, starting from Chengdu and planning to promote this strategy in other regions[16] - The company is actively pursuing acquisition opportunities in Southeast Asia, having acquired a fertility license in Laos in March 2020, with plans for rapid growth post-COVID-19[20] - The company has made multiple acquisitions in 2021 and the first half of 2022 to enhance its service offerings and market presence[4] Patient Services and Satisfaction - The success rate for IVF treatments at Chengdu Xinan Hospital and Jinjiang Reproductive Center reached 55.6% in the first half of 2022[10] - The penetration rate of premium services at Chengdu Xinan Hospital reached 10% in the first half of 2022, reflecting the demand for high-end services[10] - The number of patients who successfully conceived after receiving ARS treatment at Chengdu Xinan Hospital and subsequently registered for obstetric care at Jin Xin Women and Children's Hospital increased by 125% year-on-year in the first half of 2022[11] - Chengdu Xinan Hospital achieved a patient satisfaction rate of 96% for transplant patients in the first half of 2022, up from 93% in the same period of 2021[10] - Jin Xin Women and Children's Hospital's revenue grew by 14% year-on-year in the first half of 2022, despite challenges from the COVID-19 pandemic[11] Research and Development - The company continues to enhance its research and development efforts to improve clinical outcomes and patient experience in the reproductive health sector[9] - The company has established the Jin Xin Medical Innovation Research Center to enhance research management and clinical innovation, publishing 11 papers in core journals in the first half of 2022[21] - The company is focusing on strengthening its clinical quality and creating new business growth points through research and innovation, including collaborations with USC on IVF clinical research[21] Financial Management and Expenses - The group's revenue cost increased by 35.9% from approximately RMB 496.1 million for the six months ended June 30, 2021, to approximately RMB 673.9 million for the six months ended June 30, 2022[30] - Administrative expenses rose by 29.7% from approximately RMB 144.7 million to approximately RMB 187.6 million, driven by the consolidation of the new hospital and inflation-related cost increases[36] - Financial costs increased significantly from approximately RMB 8.8 million to approximately RMB 33.0 million, mainly due to interest from a USD 300 million syndicated bank loan[37] - Sales and distribution expenses surged by 105.5% from approximately RMB 26.1 million to approximately RMB 53.7 million, primarily due to increased marketing expenses in response to the recovery from the COVID-19 pandemic[35] Corporate Governance and Compliance - The group maintains a commitment to high standards of corporate governance and compliance with applicable codes[61][62] - The company has not engaged in any buybacks or repurchases of its listed securities during the reporting period[63] - The board did not recommend any interim dividend for the six months ended June 30, 2022, consistent with the previous year[59] Future Outlook - The company has provided a positive outlook for the second half of 2022, projecting a revenue growth of AA% driven by new product launches and market expansion initiatives[188] - The company is actively pursuing market expansion strategies, including the establishment of new clinics in key regions, which is anticipated to increase its market share[187] - The company is focusing on enhancing its digital platforms to improve patient engagement and streamline service delivery, which is expected to drive future growth[188] - The company has outlined a commitment to sustainability in its operations, aiming to reduce its carbon footprint by CC% over the next five years[187]

Financial Performance - In 2021, the company reported revenue of RMB 1,838,826 thousand, an increase of 28.9% compared to RMB 1,426,088 thousand in 2020[10] - The gross profit for 2021 was RMB 771,482 thousand, with a gross margin of 42.0%, compared to 39.7% in 2020[10] - The net profit for 2021 was RMB 353,697 thousand, reflecting a net profit margin of 19.2%, up from 18.3% in 2020[10] - The adjusted net profit for 2021 was RMB 455,276 thousand, with an adjusted net profit margin of 24.8%[10] - The group’s revenue increased by 28.9% from approximately RMB 1,426.1 million in the year ended December 31, 2020, to approximately RMB 1,838.8 million in the year ended December 31, 2021, primarily due to a rapid recovery from the COVID-19 pandemic and increasing demand for fertility treatments[45] - Net profit increased by 35.8% from approximately RMB 260.5 million for the year ended December 31, 2020, to approximately RMB 353.7 million for the year ended December 31, 2021, with a net profit margin of 19.2% compared to 18.3% in the previous year[68] - Non-IFRS adjusted net profit rose by 22.3% from approximately RMB 372.3 million for the year ended December 31, 2020, to approximately RMB 455.3 million for the year ended December 31, 2021, with an adjusted net profit margin of 24.8%[68] Asset Growth - Total assets increased to RMB 12,825,390 thousand in 2021, compared to RMB 9,163,227 thousand in 2020[11] - Inventory increased by 83.7% from approximately RMB 255 million on December 31, 2020, to approximately RMB 468 million on December 31, 2021, primarily due to the consolidation of Jinxin Medical Group[72] - Accounts receivable and other receivables rose by 107.6% from approximately RMB 687 million on December 31, 2020, to approximately RMB 1,427 million on December 31, 2021, mainly due to the consolidation of Jinxin Medical Group[73] - Goodwill increased by 205.7% from approximately RMB 896 million to approximately RMB 2,720 million, attributed to the consolidation of Jinxin Medical Group[74] Market Expansion and Acquisitions - The company expanded its service offerings through acquisitions in Chengdu, Yunnan, Hong Kong, and the United States in 2021[4] - The acquisition of Jinxin Hospital Management (Cayman) Company Limited in November 2021 allowed the company to control 100% of Jinxin Medical Group, expanding its service offerings in obstetrics and pediatrics[20] - The company plans to complete the acquisition of an additional 15% stake in Shenzhen Zhongshan Hospital by May 31, 2022, increasing its ownership to approximately 94.44%[23] - The company plans to acquire 100% equity of Shenzhen Hengyu Lianxiang Investment Development Co., Ltd. for approximately RMB 1,727 million, which will be fully consolidated into the company's financial statements upon completion[92] - The company aims to accelerate its regional planning strategy in Greater China by acquiring ARS providers with strong regional influence[38] Operational Performance - The Chengdu hospital recorded a historical high revenue exceeding 800 million RMB in 2021, while the Shenzhen hospital experienced the fastest growth in its history[13] - IVF treatment cycles increased to 27,354 in 2021 from 22,879 in 2020, reflecting a significant operational growth[30] - Revenue from Shenzhen operations rose by 42.4% to approximately RMB 426.9 million, attributed to an increase in IVF treatment cycles and average spending per cycle[50] - Revenue from U.S. operations increased by 21.0% to approximately RMB 459.3 million, mainly due to an increase in IVF treatment cycles and average spending per cycle[51] Patient Satisfaction and Service Quality - Patient satisfaction at Chengdu hospital increased to 93% in 2021, with a special service penetration rate reaching 12% by the end of the year[18] - The Chengdu hospital received JCI accreditation with a score of 9.93 out of 10, confirming its adherence to international service and patient safety standards[18] - The company is committed to providing personalized ARS treatment solutions, categorizing IVF outpatient services into five specialized areas to better meet patient needs[18] - The company plans to enhance its strategic positioning by aligning its development with national policies aimed at increasing birth rates, focusing on improving medical service quality and patient satisfaction[13] Management and Governance - The new management team demonstrated strong performance in 2021, reinforcing the company's strategic layout in organizational and talent development[13] - The company has established a robust governance structure to ensure independent oversight and strategic direction[104] - The management team includes professionals with extensive backgrounds in finance, investment, and healthcare consulting[102][104] - The company is committed to maintaining high standards of corporate governance through the appointment of qualified independent directors[107] Research and Development - The company has established the Jinxin Medical Innovation Research Center to enhance research capabilities and improve clinical outcomes in assisted reproductive technology[41] - The company has received national awards for scientific progress, highlighting its commitment to innovation in reproductive medicine[111] - The company is actively involved in various national and provincial-level research projects, demonstrating its leadership in the field[111] Financial Management and Capital Structure - The company raised approximately HKD 2,808.1 million from its IPO and approximately HKD 1,253.47 million from a placement in February 2021, along with an additional USD 300 million from syndicated loans to support its operational and expansion plans[76] - The capital debt ratio as of December 31, 2021, was 1.87%, a decrease from 2.18% on December 31, 2020[85] - The company has a strong financial management framework in place, ensuring effective oversight of accounting, financial reporting, and capital market activities[114] Social Responsibility and Compliance - The company is committed to improving ESG initiatives, including community health education and providing free medications and IVF treatments to financially challenged patients[43] - The company emphasizes its commitment to social responsibility and sustainable growth through environmental and employee welfare initiatives[126] - The company has complied with all relevant laws and regulations during the reporting period, with no significant violations reported[127]

Financial Performance - Total assets increased by 13.3% to $10,384,889 compared to $9,163,227 in the previous period[15] - Total equity rose by 15.6% to $8,623,895 from $7,462,486 year-on-year[15] - Revenue growth of 40.4% in the first half of 2021 compared to the same period in 2020, with contributions from China and the US increasing by 42.2% and 35.6% respectively[17] - Cash and cash equivalents surged by 213.5% to $2,137,084 from $681,619 in the previous period[15] - The company's revenue increased by 40.4% from approximately RMB 611.8 million for the six months ended June 30, 2020, to approximately RMB 859.3 million for the six months ended June 30, 2021, primarily due to a rapid recovery from the COVID-19 pandemic and rising demand for fertility treatments[45] - Revenue from the ARS segment increased from approximately RMB 429.4 million in 2020 to approximately RMB 579.3 million in 2021, accounting for 67.4% of total revenue[46] - The company's gross profit increased by 67.0% from approximately RMB 217.5 million to approximately RMB 363.2 million, with a gross margin improvement from 35.5% to 42.3%[54] - Net profit increased by 31.7% from approximately RMB 1,235 million for the six months ended June 30, 2020, to approximately RMB 1,626 million for the six months ended June 30, 2021, with a net profit margin of 18.9%[68] - Non-IFRS adjusted net profit rose by 36.2% from approximately RMB 1,675 million for the six months ended June 30, 2020, to approximately RMB 2,281 million for the six months ended June 30, 2021, with an adjusted net profit margin of 26.5%[68] Market Expansion and Strategy - The company maintained a leading position in the ARS market, with a strong reputation built on high success rates and experienced medical teams[17] - The company executed growth and acquisition strategies to enhance brand recognition in the ARS market[17] - The company aims to attract top talent and operational teams to further expand operations and improve patient experience[17] - The company has established a competitive advantage in the ARS market through brand, technology, and management[3] - The company expanded its network into Wuhan and Southeast Asia through acquisitions in 2020[3] - The company is focusing on the Greater Bay Area for strategic growth, leveraging its leadership position in China to expand its Assisted Reproductive Services (ARS) business[20] - Recent collaborations with Jiuzhou Hospital and Huanjia Hospital will enhance management services and resource integration to increase market share in Southwest China[34] - The company plans to focus on the Greater Bay Area for market expansion, including acquiring new facilities and enhancing service capabilities in Shenzhen[34] - In the US, the company aims to strengthen its market position by hiring new doctors and opening new centers, particularly in the western regions[36] Operational Developments - The company has established a male reproductive center at Shenzhen Zhongshan Hospital to expand its service offerings for male infertility and urology[21] - The company has renovated Wuhan Jinxin Hospital to enhance operational capacity and restore services, with all departments resuming operations by February 2021[21] - The company has categorized fertility treatment services at Chengdu Xinan Hospital into five specialties to provide tailored solutions for patients facing infertility issues[21] - The company has launched new premium service packages to meet the diverse needs of patients, enhancing overall patient experience[23] - As of June 30, 2021, the company established partnerships with 75 medical institutions, expanding its two-way referral network[24] Research and Development - The company published 11 scientific papers during the reporting period, enhancing its recognition in the field of reproductive medicine[26] - The company established a joint laboratory with the Shenzhen Institute of Advanced Technology to focus on reproductive immunology research[26] - Continuous investment in R&D is aimed at improving clinical outcomes and expanding service offerings, with a focus on enhancing IVF laboratory quality control[41] - The company is investing in R&D and clinical practice-related research activities to enhance its research capabilities[43] Financial Management - R&D expenses rose by 14.9% to approximately RMB 5.0 million, mainly due to increased material costs for the R&D team[57] - Other income decreased by 49.1% to approximately RMB 21.8 million, primarily due to a reduction in interest income from time deposits[55] - Administrative expenses rose by 50.2% from approximately RMB 963 million for the six months ended June 30, 2020, to approximately RMB 1,447 million for the six months ended June 30, 2021, primarily due to an increase in employee stock option plan expenses of RMB 284 million[60] - Financial costs for the six months ended June 30, 2021, were approximately RMB 88 million, up from RMB 52 million for the same period in 2020[61] - Income tax expenses increased by 52.5% from approximately RMB 290 million for the six months ended June 30, 2020, to approximately RMB 442 million for the six months ended June 30, 2021, due to an increase in profit before tax[62] Shareholder Information - As of June 30, 2021, John G. Wilcox, M.D. holds a 13.67% stake in the company, representing 342,688,755 shares[108] - The total number of issued shares as of June 30, 2021, was 2,507,583,802[109] - The company has no arrangements for directors to acquire shares or debt securities for personal benefit during the reporting period[111] - No individual shareholder has more than 10% of the issued share capital post-listing as of June 30, 2021[114] - The majority of shares are held by controlled corporations and medical professionals, indicating a concentrated ownership structure[113][114] Future Outlook - The global ARS market is expected to recover post-COVID-19 and continue its growth trend, with China's market penetration still relatively low compared to approximately 30% in Europe and the US[33] - The company plans to continue expanding its market presence and investing in new technologies to enhance its service offerings[138] - Future guidance remains optimistic, with management expecting to recover significant amounts from related party receivables within the next year[183]