Warburg Pincus-backed Jinxin Fertility files for HK IPO

Jinxin Fertility
(L-R) The Hong Kong Exchanges flag, Chinese national flag and Hong Kong flag are hoisted outside the Hong Kong Stocks Exchange in Hong Kong June 7, 2016. REUTERS/Bobby Yip

Jinxin Fertility Group Ltd, the Sichuan-based assisted-reproduction company backed by private equity giant Warburg Pincus, has filed to list in Hong Kong less than five months after completing a major private equity round.

Its filing is heavily redacted so it is still unclear how much Jinxin Fertility Group seeks to raise from the IPO but the company said it will use the proceeds to expand and upgrade existing reproductive medical facilities in its network in China.

The company, founded in 2003, also seeks to use the money raised in the IPO to acquire additional assisted reproductive medical facilities in Chinese provinces that it is currently not operating in.

“We intend to expand our national network by acquiring assisted reproductive services (ARS) providers or entering into cooperation agreements with other service providers in populous and affluent urban centers with limited ARS providers,” the company said in its filing.

Jinxin Fertility had in October 2018 raised an undisclosed amount in a funding round co-led by Warburg Pincus and CNCB (Hong Kong) Investment Limited, a subsidiary of China CITIC Bank Corporation. The round was joined by Sequoia China and WuXi AppTec.

Jinxin Fertility claims to be the leading ARS provider in China. In 2017, its assisted reproductive medical facilities in China performed 18,018 IVF treatment cycles, according to the F&S Report prepared by Frost & Sullivan.

The report added that the ARS market in China experienced rapid growth from 11.5 billion yuan ($1.7 billion) in 2013 to 22.1 billion yuan ($3.21 billion) in 2017. The market is expected to grow to 52.7 billion yuan ($7.8 billion) by 2023.

China had more than 40 million patients with fertility problems in 2016, according to statistics from China’s National Health and Family Planning Commission.

“China presents a vast opportunity for ARS providers as a result of a low ARS penetration rate, an increasing rate of infertility, and limited supply of ARS,” the report added.

According to a Warburg Pincus announcement, assisted reproduction has become one of the fastest growing markets among the healthcare industry in China, with a potential market size of more than 100 billion yuan ($15 billion).

Jinxin Fertility said its market leadership in China has resulted in growing revenue generated primarily from providing ARS, management services, and ancillary medical services. In the nine months ended September 30, 2018, its revenue stood at 669.6 million yuan ($99.6 million).

In December 2018, the company acquired HRC Management, which has been providing management services to HRC Medical in the United States. HRC is the largest assisted reproductive centre on the west coast of the US with the largest number of IVF cycles performed.

“China’s assisted reproductive market is expected to maintain strong growth as demand for quality assisted reproduction services continues to rise,” Jinxin said.

Jinxing has named Morgan Stanley Asia and CLSA Capital Markets as joint sponsors for its Hong Kong IPO.

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