Jinxin Reproduction announced its interim results. In the first half of 2023, the company achieved operating income of 1,334 million yuan, a year-on-year increase of 17.2%; net profit of 224 million yuan, an increase of 19.3%; non-IFRS adjusted net profit of 255 million yuan, a year-on-year decrease of 1.2%. The adjustments mainly included depreciation and amortization of 248.68 million yuan from acquisitions and equity incentives of 6.27,000 yuan.
Domestic business: Chengdu has completed IVF and the integration of women and children, and regional business is recovering. Chengdu:
Xilong Gynecology Hospital and Jinxin Women's and Children's Hospital have completed the merger, deepening the integration of IVF and gynecology and pediatric departments. The two hospitals have successively obtained molecular diagnostic qualifications, PGT trial operation qualifications, and special technical service qualifications for mothers and children, and specialist construction has been further strengthened. Shenzhen: The number of initial IVF visits increased by 32.7% year on year, the number of cycles increased by 8.7% year on year. The construction of a new building is also progressing rapidly, and it is expected that the relocation can be completed in 2024. Kunming: Jiuzhou Hospital and Wanjia Hospital were quickly integrated, and the IVF business developed rapidly. The number of IVF cycles in the first half of the year increased 39% year on year. Wuhan: Wuhan Jinxin officially resumed trading at the end of August 2022. Business gradually returned to normal, with revenue increasing 152% year-on-year in the first half of the year.
Overseas business: HRC business resumed rapidly, and Hong Kong's egg freezing business achieved a breakthrough. US: International travel restrictions were gradually lifted after the epidemic, and the HRC business showed a recovery trend. Revenue increased 21% year-on-year in the first half of the year, and doctor recruitment was progressing smoothly. Currently, HRC has a total of 23 doctors. Hong Kong:
Total revenue in the first half of the year increased 16% year on year. The promotion of the egg freezing business achieved remarkable results. The number of eggs frozen increased 76% year on year, the IVF business also recovered, and the number of cycles increased 16% year on year. LAOS:
Jinrui Medical Center entered trial operation in August 2023 and officially entered the Southeast Asian market.
Profit forecasts and investment recommendations. Considering the initial results of the company's business adjustments and post-epidemic recovery effects, it is estimated that the company's net profit for 2023-2025 will be 352, 480, and 640 million yuan, respectively. At the same time, based on the company's scarcity and leading effect in the private assisted reproduction field, the company was given a valuation of PE 50X in 2023, with a corresponding reasonable value of HK$6.95 per share, and a “buy” rating.
Risk warning. Regulatory risk, brain drain risk, negative reporting risk.