Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>As China’s leading assisted reproductive service provider, <a href="https://www.smartkarma.com/entities/jinxin-fertility-group-ltd" target="_blank" data-smartkarma-citation="entities:28003:1" rel="noopener">Jinxin Fertility Co Ltd (1951 HK)</a> can be negatively affected by the country’s consistently falling birth rate.</li>
<li>The company performed 27,354 IVF cycles in 2021, 20% higher than that of 2020. However, it is still lower than 27,854 IVF cycles performed in 2019, pre-COVID era.</li>
<li>Concern over the fact that the Chinese government may impose restrictions on the for-profit healthcare service providers, like it did for K12 education sector, is souring near-term sentiment.</li>
</ul>


As China’s leading assisted reproductive service provider, Jinxin Fertility Co Ltd (1951 HK) can be negatively affected by the country’s consistently falling birth rate.
The company performed 27,354 IVF cycles in 2021, 20% higher than that of 2020. However, it is still lower than 27,854 IVF cycles performed in 2019, pre-COVID era.
Concern over the fact that the Chinese government may impose restrictions on the for-profit healthcare service providers, like it did for K12 education sector, is souring near-term sentiment.


Jinxin Fertility (1951 HK): Regulatory Risk and Macro Headwind Jeopardize Growth Prospect

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>IVF penetration rate in China is not high and the rate of improvement is very slow. With public hospitals accounting for over 90% market share, Jinxin’s growth space is limited.</li>
<li>Jinxin has extended its business scope to support the entire fertility and pregnancy lifecycle. But it could drag down the overall net profit margin,resulting in lower-than-expected performance in the end.</li>
<li>The breakthrough point is internationalization. If COVID-19 is under control and Jinxin continues to expand overseas markets successfully, it could change its valuation logic and open up upward potential.</li>
</ul>


IVF penetration rate in China is not high and the rate of improvement is very slow. With public hospitals accounting for over 90% market share, Jinxin’s growth space is limited.
Jinxin has extended its business scope to support the entire fertility and pregnancy lifecycle. But it could drag down the overall net profit margin,resulting in lower-than-expected performance in the end.
The breakthrough point is internationalization. If COVID-19 is under control and Jinxin continues to expand overseas markets successfully, it could change its valuation logic and open up upward potential.


Jinxin Fertility Co Ltd (1951.HK) - The Outlook Is Not Optimistic Even with Policy Support

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>Including the A$0.12 permitted dividend (paid on 14 April), CapVest’s revised scheme offer is A$8.27 and the off-market takeover offer is A$8.22. The new offer addresses the capital return issue.</li>
<li>Despite today’s <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02509261_PS-2A1368239?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">interims orders</a> from the takeover panel, CapVest’s scheme transaction still has virtually no chance of getting up due to BGH's 19.99% stake.</li>
<li>BGH’s like-for-like off-market offer price of A$8.12 per share is 1.2% below CapVest’s off-market offer, suggesting that there is more life to this takeover tussle for <a href="https://www.smartkarma.com/entities/virtus-health-ltd" target="_blank" data-smartkarma-citation="entities:14776:1" rel="noopener">Virtus Health (VRT AU)</a>.</li>
</ul>


Including the A$0.12 permitted dividend (paid on 14 April), CapVest’s revised scheme offer is A$8.27 and the off-market takeover offer is A$8.22. The new offer addresses the capital return issue.
Despite today’s interims orders from the takeover panel, CapVest’s scheme transaction still has virtually no chance of getting up due to BGH's 19.99% stake.
BGH’s like-for-like off-market offer price of A$8.12 per share is 1.2% below CapVest’s off-market offer, suggesting that there is more life to this takeover tussle for Virtus Health (VRT AU).


CapVest Fights Back with Revised Offers for Virtus

<ul>
<li>BGH announced an unconditional off-market takeover offer at A$8.00 cash per share along with intention for on-market purchases equal to, below, or higher than the offer price.</li>
<li>CapVest’s scheme transaction while superior has virtually no chance of getting up. CapVest’s off-market transaction is less appealing due to the uncertain outcome of the ATO ruling.</li>
<li>The last close price of A$8.15 is higher than both BGH and CapVest’s off-market offers which suggest both would need to raise their bid.  </li>
</ul>


BGH announced an unconditional off-market takeover offer at A$8.00 cash per share along with intention for on-market purchases equal to, below, or higher than the offer price.
CapVest’s scheme transaction while superior has virtually no chance of getting up. CapVest’s off-market transaction is less appealing due to the uncertain outcome of the ATO ruling.
The last close price of A$8.15 is higher than both BGH and CapVest’s off-market offers which suggest both would need to raise their bid.  


BGH Returns with an A$8.00 Off-Market Takeover Bid for Virtus

<ul>
<li>CapVest’s binding offer is A$8.25 via a scheme or A$8.10 via an off-market takeover. The scheme offer is a 5.8% premium to its previous scheme offer of A$7.80 per share. </li>
<li>Rival bidder BGH lobbed a revised non-binding offer of A$8.10 per share after market close on 10 March. The Board will consider any further improved competing offer.  </li>
<li>BGH (19.99% stake) previously stated that it will vote against a CapVest scheme and will not accept any takeover offer. Another round of bidding is a possibility. </li>
</ul>


CapVest’s binding offer is A$8.25 via a scheme or A$8.10 via an off-market takeover. The scheme offer is a 5.8% premium to its previous scheme offer of A$7.80 per share. 
Rival bidder BGH lobbed a revised non-binding offer of A$8.10 per share after market close on 10 March. The Board will consider any further improved competing offer.  
BGH (19.99% stake) previously stated that it will vote against a CapVest scheme and will not accept any takeover offer. Another round of bidding is a possibility. 


CapVest Inches past BGH in a Heated Takeover Battle for Virtus

China

Jinxin Fertility Group is a leading international provider of assisted reproductive services (ARS) and assisted reproductive technology (ART). Its core offerings include In Vitro Fertilization (IVF), Intrauterine Insemination (IUI), egg retrieval, embryo transfer, and genetic screening, alongside a range of women's health services. The company is headquartered in Chengdu, China, and was founded in 1951.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Jinxin Fertility (1951 HK)