Jinxin Fertility Group Files for Hong Kong IPO, Conducted Over 18,000 IVF Cycles in 2017

VCBeat (WeChat: vcbeat) has learned that on February 18, Jinxin Fertility Group Limited submitted its listing application to the Hong Kong Stock Exchange, with Morgan Stanley and CLSA acting as joint sponsors.

Jinxin Fertility Group is a provider of assisted reproductive services, with shareholders including prominent investors such as Warburg Pincus, LLC, Sequoia Capital China, WuXi AppTec, and CITIC Bank.

In China, as of the latest practicable date, the Group owns and operatesChengdu Xina Gynecology and Obstetrics HospitalandShenzhen Zhongshan Urology Hospital(Acquired in January 2017), jointly managing Chengdu CityJinjiang District Maternal and Child Health Hospital Reproductive Center(Jinjiang Reproductive Center). In the United States, on December 24, 2018, the Group acquiredWillsun BVI, which is owned by HRC Management, the entity that manages HRC Medical pursuant to the Management Services Agreement.

According to a Frost & Sullivan report, Shenzhen Zhongshan Hospital achieved the first IVF-ET baby birth in Shenzhen and also realized the first ICSI baby birth in the city. Additionally, Jinjiang Reproductive Center was rated as a Grade A Key Specialty Center for Reproductive Medicine in Sichuan Province in 2016. In the western United States, HRC Fertility is a recognized pioneer in IVF using ICSI technology and the application of PGS technology.

China presents significant opportunities for assisted reproductive technology (ART) service providers, driven by low ART penetration rates, rising infertility prevalence, and limited supply of ART services. Meanwhile, the United States represents an attractive ART market, offering comprehensive, mature, and high-end assisted reproductive services.

According to the Frost & Sullivan report, Jinxin Fertility Group’s assisted reproductive technology (ART) medical institutions in China ranked third in the Chinese market in 2017, performing18,018 IVF Treatment CyclesHRC Fertility ranked first in the U.S. West assisted reproductive services market in 2017, conducting4,371 IVF treatment cycles. The Group, together with Jinjiang Reproductive Center, is one of only approximately 20 licensed assisted reproductive service providers in China that performed more than 5,000 IVF treatment cycles in 2017.

Regarding the most closely monitored metric of IVF success rates, the group’s assisted reproductive technology (ART) clinics within its networks in China and the United States have achieved success rates that exceed the national averages in both countries. In 2016, across all age groups defined by the Centers for Disease Control and Prevention (CDC), HRC Fertility’s success rates for non-donor embryo transfers surpassed both the U.S. national average and the California state average.

According to the Frost & Sullivan report, Jinxin Fertility Group’s assisted reproductive technology (ART) medical institutions in China in 2017High success rate, reaching 53%, while the national average stood at 45%. Similarly, according to the Frost & Sullivan report, in 2016,HRC Fertility’s Success Rate Reaches 62%, respectively higher than the U.S. average (53%) and the California average (57%).

In 2016, across all age groups defined by the Centers for Disease Control and Prevention (CDC), HRC Fertility’s success rates for non-donor embryo transfers exceeded both the U.S. national average and the California state average. According to a Frost & Sullivan report, in 2016, HRC Fertility ranked second and third among high-volume assisted reproductive technology (ART) service providers in the United States in terms of fresh embryo transfer success rates and frozen embryo transfer success rates, respectively.

As for revenue, during the Track Record Period, Jinxin Fertility Group’s revenue was primarily derived from the provision ofAssisted Reproductive Services, Management Services, and Ancillary Medical ServicesFor the years 2016 and 2017, and for the nine months ended September 30, 2017 and 2018, revenue amounted to RMB346.4 million, RMB662.8 million, RMB484.4 million, and RMB669.6 million, respectively. For the same periods, the Group’s profit for the period and total comprehensive income were RMB103.7 million, RMB198.6 million, RMB150.7 million, and RMB202.8 million, respectively.

Regarding the use of proceeds from the listing, approximately 25.0% will be used to expand and upgrade the Group’s existing assisted reproductive technology (ART) medical institutions within its China network and to recruit medical professionals (including physicians and embryologists) to increase capacity, broaden the service portfolio, and expand market share; approximately 20.0% will be allocated to potential acquisitions of additional ART medical institutions in Chinese provinces where the Group currently has no operations; approximately 10.0% will be invested in research and development to enhance overall performance and maintain the Group’s leading position in ART; approximately 20.0% will be used for potential acquisitions of ART service providers and businesses along the assisted reproduction services value chain; approximately 15.0% will be dedicated to strengthening brand focus and enhancing the overall emphasis on assisted reproductive services in China and the United States; and approximately 10.0% will be used for working capital and general corporate purposes.

VCBeat will continue to monitor the future developments of Jinxin Fertility Medical Group.