Warburg Pincus set for part-exit from Jinxin Fertility

The GP will offload about 134.7 million shares at HK$11.18 apiece, lowering its position from 18.4% to 12.8%, according to a filing. The private equity firm held about 22% at the time of Jinxin’s IPO last year. It remains one of the largest shareholders. Several other investors will pare their stakes as well.

Shares in Jinxin fell as much as 8.5% following confirmation of the transaction and were trading at HK$10.92 as of mid-morning July 9, giving the company a market capitalization of around HK$26.8 billion. Warburg Pincus has invested $48.6 million in Jinxin since 2017. 

Jinxin is considered a leading IVF services operator in both China and the US. It owns and operates the Chengdu Xinan Gynecological Hospital and Shenzhen Zhongshan Urological Hospital and jointly manages an IVF clinic at the Maternity and Child Health Hospital in Jinjiang district. It built out a US presence through the acquisition of local operator HRC Management.

Jinxin says it ranked third in China’s assisted reproduction market in 2018 with about 21,000 IVF cycles performed, representing 3% of the local market. This makes it the most active non-state controlled player in the country.

As of 2017, Jinxin claimed to be ranked first in the US in terms of IVF cycles provided to patients traveling from China. It notes that the number of Chinese patients going to the US for fertility services is set to increase from 5,400 in 2018 to 13,500 in 2023. 

Revenue came to RMB1.6 billion ($229 million) in 2019, up 79% year-on-year, while net profit rose 98% to RMB420.7 million. The company attributed the performance to expansion of its operational network and strong uptake for a new VIP service. This service includes access to a private consultation area, flexible scheduling, nutrition guidance, psychological counseling, and fitness courses.

Warburg Pincus generated distributions of $2 billion from its China investments last year, when the country came to represent 40% of its global portfolio, up from 25% earlier in the 2010s. The private equity firm has invested some $12 billion and generated distributions of $13 billion since entering China in the 1990s. This includes at least 27 IPOs.

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• Topics
• Greater China
• Healthcare
• Open market
• Hong Kong (China)
• China
• Warburg Pincus Asia
• Exit