Down in revenue, volume from 2021 to 2022, reported that Insiders bullish on stocks, growth
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BY: RON SHINKMAN
With a population of 1.4 billion, China is one of the world’s biggest markets for IVF services. Jinxin Fertility Group Ltd., based in Chengdu in Eastern China, is among its biggest players.
The stock analysis site, Simply Wall St, reported in June that company insiders have secured a larger position of Jinxin, buying approximately HK$54m worth of shares – or about $6.9 million in U.S. dollars – in the 12 months prior to the article, but Inside Reproductive Health wasn’t able to independently verify Simply Wall Street’s figures with information from the Hong Kong Stock Exchange.
Background on Jinxin Fertility
Although Jinxin’s history of operating hospitals and clinics dates back to the early 1950s, Jinxin Fertility’s focus on reproductive medicine began in 2003. A group of physicians formed Jinjiang IVF Center in Chengdu that year; the practice joined Jinxin in 2010, according to a company stock prospectus issued in 2019.
Today, Jinxin Fertility Group operates eight clinics at hospitals it owns in China, along with another clinic it operates jointly, the Chengdu Jinjiang District Maternal and Child Health Hospital Reproductive Medicine Center.
Jinxin also has a footprint in the U.S. after it acquired HRC Management in December 2018. HRC operates a chain of nine clinics in Southern California stretching from Los Angeles to San Diego. It also has a relationship with USC Fertility Clinic in Los Angeles that includes a fellowship program to train more physicians in reproductive medicine, according to Jinxin’s most recent annual report.
The company made an initial public offering on the Hong Kong Stock Exchange in 2019. Its stock price debuted at around $1.24 U.S. It was recently trading at around 57 cents U.S. per share.
Executive Leadership
Jinxin Fertility CEO Sunny Dong was named CEO in April 2020 after serving as CFO and board member for an affiliate, Jinxin Medical Investment Co. Dong, who is in his mid-30s, previously served as a director with the China asset management arm of Dongxing Securities in Hong Kong, as well as accounting/business consulting giant PwC, according to his LinkedIn profile. He did not respond to written questions for comment, nor did another executive with the firm.
Volume, Revenue and Competition
Last year, Jinxin-owned clinics performed 26,125 IVF cycles, down from 27,354 in 2021, according to the company’s annual report. That is equivalent to some of the largest fertility chains in the U.S. However, the company was impacted by COVID-19 in 2020, Jinxin performed just 22,879 cycles that year, down nearly 18% from the 27,854 cycles it performed in 2019.
Jinxin Fertility Group’s bottom line has since suffered. It reported adjusted net income of $38.4 million on revenue of $331.1 million last year. That compares to adjusted net income of $63.8 million on revenue of $257.5 million in 2021.
Overall, Jinxin said in the introduction to its 2022 annual report that it is the third-largest provider of IVF services in China (as of 2018), and that its number of annual cycles represent about 3.1% of the country’s total market share. Its biggest competitors, according to its 2019 stock prospectus, are the Reproduction Hospital Affiliated to Shandong University, Peking University Third Hospital, Shanghai Ninth People’s Hospital and the Reproductive and Genetic Hospital of Citic-Xiangya.
Expected Growth from Public Policy Changes
There is room for growth in China in the coming years. Despite it currently leading the world in population, the nation has seen its fertility rates plummet in recent years to 1.2 births per woman, down more than half from 1989. That has prompted the Beijing city government last month to announce it would pay for 16 different types of assisted reproductive technology, including IVF, to increase the birth rate.
Jinxin said in its annual report that it “expects the penetration rate and market size for assisted reproductive services in China to significantly increase as the government implements supportive policies and supportive measures to encourage fertility.” The nation as of earlier this year had just 539 institutions performing IVF and only 27 sperm banks to serve a population more than four times larger than the United States, according to a Chinese government survey issued late last year.
The themes reported in this publication are those of the news. They do not reflect the views of Inside Reproductive Health, nor of the Advertiser
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