Core Viewpoint - The domestic assisted reproduction industry has been fully included in medical insurance, which, along with fertility subsidies and other supportive policies, is expected to accelerate the industry's penetration rate. 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 2.602 billion, 2.867 billion, and 3.178 billion yuan for 2025-2027, with adjusted net profit estimates of 282 million, 325 million, and 376 million yuan respectively. The target stock price is set at 3.23 HKD, maintaining a "recommended" rating [1]. Group 1: Financial Performance - In the first half of 2025, the company reported revenues of 1.289 billion yuan, a decrease of 10.7%. The net loss attributable to shareholders was 1.04 billion yuan, with adjusted net profit down 68.3% to 82 million yuan. Operating cash flow also declined by 30.2% to 268 million yuan [1][2]. Group 2: Regional Performance - Revenue from the Chengdu region was 768 million yuan, down 13.1%, with the number of egg retrieval cycles at 7,111, a decrease of 6.1%. The decline in cycles was attributed to a reduction in new patients and a significant increase in the proportion of IUI cycles, which saw patient numbers grow over threefold to 969. The VIP penetration rate at Sichuan Jinxin Xinan Hospital reached approximately 20.8% [2]. - The Greater Bay Area reported medical service revenue of 206 million yuan, down 14.9%, with egg retrieval cycles at 2,539, a decrease of 16.0%. Similar to Chengdu, the reduction in cycles was influenced by changes in clinical consultation processes and an increase in IUI cycles [2]. - Revenue from Kunming and Wuhan was 131 million yuan, up 0.8%, with egg retrieval cycles at 2,059, down 3.5%, primarily due to short-term operational impacts from hospital renovations [2]. - Overseas medical service revenue reached 405 million yuan, an increase of 3.7%. HRC Medical reported 2,058 egg retrieval cycles, down 8.9%, affected by fluctuations in US-China relations and delays in the implementation of California's IVF insurance coverage legislation [2]. Group 3: Profitability and Cost Structure - The company's gross margin for the first half of 2025 was 30.4%, a decrease of 10.0 percentage points. The decline in gross margin was influenced by two main factors: a decrease in revenue due to a higher proportion of lower-priced IUI patients, a drop in average single-cycle prices following medical insurance adjustments, and a 24% decline in traditional delivery volumes leading to reduced obstetric income. Additionally, operational costs increased due to the expansion of HRC Medical in the US, which added four new clinics, and accelerated amortization costs related to lease adjustments at Wuhan Jinxin Hospital [3]. - A significant factor contributing to the profit loss was the impairment of goodwill and intangible assets, with a total of 993 million yuan recognized in the first half of 2025 related to US and Laos operations. This included 952 million 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(01951)“推荐”评级 目标价3.23港元