PE-backed Jinxin Fertility files for HK IPO

Jinxin Fertility was founded in 2003 with a single in-vitro fertility (IVF) facility in Chengdu, and now operates four clinics in China – three owned by the company and one under a joint management agreement – and three in California. According to the prospectus, in 2017 the company performed over 18,000 IVF treatment cycles, the third-highest total in China and the highest if state-owned providers are excluded. Its US subsidiary performed more than 4,000 treatment cycles, more than any other in its region.

PE backers include Warburg Pincus, which has invested $48.6 million since 2017 and is currently the company’s second-largest shareholder with a 22% stake. LionRock Capital, Sequoia Capital, and Ally Bridge Group participated in a $245 million funding round last year and hold stakes of 3%, 2%, and 1% respectively.

The company is one of the three major divisions of China’s Jinxin Group, along with maternity and geriatric care. Jinxin Healthcare, the maternity division, received an investment of undisclosed size last year from Capital Group Private Markets and GL Capital.

According to a report from Frost & Sullivan, the global prevalence of infertility, calculated as the number of infertile couples divided by the number of couples of reproductive age, grew from 11% in 1997 to 15% in 2017, and is expected to reach 17.2% by 2023. Drivers of this growth vary by market – in China it is attributed to environmental pollution and poor work-life balance, while in the US rising age of first birth, obesity rates, and stress levels are blamed.

Jinxin Fertility believes its established presence in both China and the US makes it well-positioned to benefit from the rise in demand for assisted reproduction services expected as a result of the growth in infertility. It plans to use about 45% of the proceeds from the IPO to expand and upgrade its facilities in China, with 20% earmarked for growing its business in the US, 15% for brand awareness in both countries, and 10% for research and development investments. Financial terms have not been disclosed.

For the year ended December 2017, Jinxin Fertility recorded RMB663 million ($98.6 million) in revenue, up from RMB346 million the year before. Over the same period net profit grew from RMB101 million to RMB199 million.

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• Topics
• Greater China
• Healthcare
• IPO
• China
• Warburg Pincus Asia
• Sequoia Capital
• Ally Bridge
• Exit