Core Viewpoint - The company reported disappointing financial results for 1H25, with a significant decline in revenue and adjusted net profit, primarily due to policy impacts and operational challenges [1][2]. Financial Performance - Revenue for 1H25 was 1.289 billion yuan, a year-on-year decrease of 10.7% [1]. - Adjusted net profit fell to 82 million yuan, down 67.0% year-on-year, which was below market expectations [1]. - The company incurred a net loss of 1.04 billion yuan, largely due to impairment losses on goodwill and intangible assets in the U.S. HRC segment [2]. Development Trends - The company anticipates a recovery in 2026 as the impact of new insurance policies stabilizes and patient volumes return to IVF treatments [1]. - The shift in the proportion of artificial insemination (IUI) cycles has temporarily affected average transaction prices and profit margins [1]. - The company plans to relocate its Shenzhen facility, which is expected to increase capacity and improve revenue and profit recovery [1]. Strategic Focus - The company is focusing on risk release, cash flow recovery, and enhancing shareholder returns through asset management and business restructuring [2]. - There is an expectation of continued supportive policies for fertility, which may boost the overall growth of the assisted reproductive industry [3]. - The company is exploring new growth opportunities in egg freezing services, which have strong customer retention and longer service cycles [3]. Profit Forecast and Valuation - The adjusted net profit forecasts for 2025 and 2026 have been reduced by 59.9% and 7.5% to 170 million yuan and 417 million yuan, respectively [3]. - The current stock price corresponds to adjusted P/E ratios of 47.58 and 20.80 for 2025 and 2026 [3]. - The company maintains an "outperform" rating with a target price of 3.90 HKD, indicating a potential upside of 25.0% from the current closing price [3].
锦欣生殖(01951.HK)：1H25低于市场预期 轻装上阵期待政策端向好