Chinese ART Company Jinxin Fertility Becomes the First Mover at HKEX
On June 25, Chinese ART company Jinxin Fertility went public at HKEX. Its IPO price was set at HKD 8.54 per share and would raise HKD 2.8 billion.
On June 25, Jinxin Fertility (锦欣生殖) went public in Hong Kong Exchanges. The initial public offering (IPO) price set at HKD 8.54 per share and would raise approximately HKD 2.8 billion (USD 360 million) in total. Jinxin Fertility is the first listed Chinese assisted reproductive technology (ART) company.
In Jinxin Fertility’s prospectus, 25% of the amount raised in the IPO would be used to expand team and upgrade facilities, 20% to acquire other domestic ART institutes with no business development, 10% for research and development (R&D), 20% to invest in industrial chain for ART, 15% for marketing and branding in both China and the U.S.A and the rest 10% for company’s general operation.
ART becomes popular in recent years. In a global scale, the increasing need ART is boosted by the human right progress such us LGBT marriages and the subfertile. Along with the development of the healthcare service level, human has more choices in giving birth, with or without fertility, at a young age or at an advanced maternal age.
Even we are at the third generation of ART, the Preimplantation Genetic Screening/Preimplantation Genetic Diagnosis (PGS/PCG), the most-applied ARTs are the first-gen and the second-gen technologies, In Vitro Fertilization and Embryo Transfer (IVF-ET) and Intracytoplasmic Sperm Injection (ICSI).
The third-gen technology PGS/PCG is facing massive ethical and moral disputes and hence has not been widely adopted in practice in China. IVF-ET is considerably a mature technology and Jinxin Fertility’s strengths lie in IVF-ET service. It is said the success rate of IVF-ET of Jinxin Fertility surpassed 54% while the national average was around 45%. From 2016 to 2017, the gross margin of Jinxin’s fertility service exceeded 43% and the profit margin was 29%.
Unlike integrated hospitals, ART hospitals concentrate on ART service only, and thus the requirements for healthcare specialists are correspondingly narrowed down to ART skills. Though its service products are not far fewer than integrated hospitals, the demand is steadily increasing, and the entrance bar is still high enough to be a solid moat for current ART companies. Entrance barrier includes the financial support, the regulatory approval and review process, and the population of healthcare technicians and service specialists since the severe scarcity in healthcare talents is the reality in China.
ART can help to solve fertility problems, but every coin has two sides. External fertilization’s researches to see if man-intervened fertility process may impose any possible and/or inevitable influence on both the mother and the baby. Warnings from Mayo Clinic generalize current concerns and possible risks for IVF service. The ARTs are not the perfect solution to fertility problems, but they truly provide a service to help family welcome a new life.