Core Viewpoint - The domestic assisted reproduction industry has been fully included in medical insurance, and with additional support policies such as fertility subsidies, the industry penetration rate is expected to accelerate. As an industry leader, Jinxin Fertility (01951) has significant brand and licensing advantages, and short-term business disruptions do not alter the long-term growth trend. The company is projected to achieve revenues of 26.0, 28.6, and 31.8 billion yuan from 2025 to 2027, with adjusted net profit estimates of 2.8, 3.3, and 3.8 billion yuan respectively. The target stock price is set at 3.23 HKD, maintaining a "recommended" rating [1]. Revenue Performance - In the first half of 2025, the company reported revenues of 12.89 billion yuan, a decrease of 10.7%. Regional performance varied, with Chengdu's medical service revenue at 7.68 billion yuan (-13.1%) and a total of 7,111 egg retrieval cycles (-6.1%). The decline in cycles was attributed to a decrease in initial consultations and a significant increase in the proportion of IUI cycles, which saw a threefold increase in patient numbers to 969. The Greater Bay Area reported medical service revenue of 2.06 billion yuan (-14.9%) with 2,539 egg retrieval cycles (-16.0%). In contrast, revenue from Kunming and Wuhan was 1.31 billion yuan (+0.8%), with 2,059 egg retrieval cycles (-3.5%). Overseas medical service revenue was 4.05 billion yuan (+3.7%), with HRC Medical reporting 2,058 egg retrieval cycles (-8.9%) due to delays in patient visits caused by fluctuations in US-China relations and the postponement of California's IVF insurance coverage legislation [2]. Profitability and Cost Structure - The company's gross profit margin for the first half of 2025 was 30.4%, down by 10.0 percentage points. The decline in gross margin was influenced by two main factors: 1) Revenue decline due to an increased proportion of lower-priced IUI patients among ARS patients, a decrease in average single-cycle prices following medical insurance adjustments, and a 24% drop in traditional delivery volumes leading to a 2% reduction in obstetric revenue; 2) Rising operational costs from the expansion of HRC Medical in the US, which added four new clinics, increasing labor and operational costs, as well as accelerated amortization of renovations in Wuhan and depreciation costs related to the relocation of a new building in Shenzhen. Additionally, goodwill and intangible asset impairments significantly contributed to the profit loss, with a total impairment of 9.93 billion yuan related to US and Laos operations in the first half of 2025, including 9.52 billion yuan related to HRC Management Group and 40.17 million yuan related to the suspension of operations in Laos [3].
华创证券：维持锦欣生殖“推荐”评级 目标价3.23港元