The company, which operates four assisted reproduction hospitals, achieved revenue of 2$300 million, with profit surging 148% to $33.88 million.
Highlights:
Aviave's share of the in vitro fertilization market in China in 2022 is only 09%, which has ranked fourth among private assisted reproductive technology service providers.
The company's hospitals have not yet obtained a license for the third-generation in vitro fertilization technology, and the market size is not as good as that of Jinxin Reproduction.
This article was written by Molly.
The trend of declining Chinese population is emerging, in addition to improving the fertility willingness of young people, helping infertile couples to complete fertility is also the focus of population policy, Beijing, Guangxi and other regions have included assisted reproduction in medical insurance, the track has also ushered in new development opportunities. Taking advantage of the policy, private assisted reproduction hospitalsAvieve Hospital Management Group***The prospectus submitted to the Hong Kong Stock Exchange at the end of last month is expected to become a follow-upJinxin Reproduction(1951.HK) after the second share of the assisted reproduction track.
Founded in 2006, Aviave is a one-stop provider of assisted reproductive technology (ART) and assistive services with four hospitals in China, located in Zhanjiang and Jieyang in Guangdong, Kunming and Tianjin in Yunnan. According to the report cited in the prospectus, in 2022, Aviaf carried out a total of 6,706 in vitro fertilization (IVF) cycles, although it only accounted for about 0 of the total number of IVF cycles performed in China in the same year9%, but it has ranked fourth among China's private assisted reproductive technology service providers.
Assisted reproduction refers to the use of medically assisted means to impregnate infertile couples, including artificial insemination (AI) and in vitro fertilization embryo transfer (IVF-ET) and their derivative technologies. According to the prospectus, from the first hospital in 2010 to the end of June 2023, about 90,000 patients have been engaged in assisted reproductionMore than 70,000 IVF cycles, completed 6More than 70,000 embryo transfers, a total of 330,000 IVF babies were born with the help of Aviafe.
The number of couples suffering from infertility in China has also increased from 55.4 million in 2018 to 56.7 million in 2022 and is expected to increase to 64.8 million in 2030 due to the postponement of childbearing age among young people in China, as well as increased mental stress, environmental pollution, and unhealthy lifestyle habits such as smoking, alcoholism, staying up late and sedentary lifestyles. Infertility refers to the reproductive system diseases in which couples of childbearing age have normal sexual life without contraception for at least 12 months and still fail to achieve pregnancy.
The increase in infertile couples has also made the demand for assisted reproductive services continue to grow, and the market size of China's assisted reproductive technology services has increased from 25.2 billion yuan in 2018 to 27.9 billion yuan in 2022, and is expected to reach 55.2 billion yuan by 2030, but the assisted reproductive service industry is still dominated by public medical institutions.
As a private assisted reproductive service provider, Avian has achieved profitability. According to the prospectus, from 2020 to 2022, the company will achieve revenue of 36.9 billion yuan, 4200 million yuan and 40.7 billion yuan, and the profit for the same period was 4,59570,000 yuan, 9,45620,000 yuan and 6,45170,000 yuan. In 2022, due to the strict restrictions on the new crown epidemic, revenue and profit declined. However, in the first half of last year, the company achieved revenue of 2300 million yuan, a year-on-year increase of 299%；Net profit was 3,38830,000 yuan, a year-on-year increase of 148%. Among them, the hospital in Zhanjiang, Guangdong Province, is the main source of income for Aviave, contributing about half of its revenue.
New technology pending licenses
In the process of infertility, assisted reproductive technology is the process of bypassing infertility and directly achieving fertilization and early embryonic development through a highly controllable laboratory environment. Assisted reproductive technology has a higher success rate than a lengthy drug**, but it is also expensive. Evie said the majority of patients at the hospital have received IVF-ET** with a success rate of 536% to 665%, compared to the average cost per patient for an IVF cycle in the first half of last year, was about 550,000 yuan to 690,000 yuan.
It is worth noting that the hospitals under Aviaf only have the license of the first generation and the second generation of IVF technology, and have not yet obtained the license of the third generation of IVF, that is, the "preimplantation genetic testing" (PGT) technology, the third generation of IVF technology can help couples with genetic diseases, elderly women, and patients with sexual abortion, and is suitable for a wider range of patient groups. At present, there are less than 100 hospitals in China with third-generation IVF licenses, and the vast majority are public hospitals. Among the private institutions, Jinxin Reproduction, the "first stock of assisted reproduction" listed on the Hong Kong stock market in 2019, has also obtained a PGT license.
Avieve said that the financing of the listing in Hong Kong will be mainly used to expand business capacity and increase the quality of assisted reproductive services, such as for the expansion, renovation and renovation of existing hospitals, as well as to obtain the qualification of a first-class specialist hospital for Zhanjiang Hospital in order to obtain a PGT license. Domestic regulators are very strict on PGT technology, and it often takes 5 to 6 years for hospitals to obtain a PGT license after obtaining a license for IVF 1 or 2 generation.
As a medium-sized private hospital group, in December 2019, Avi Aveve introduced Nanshan Laterite and Futian Laterite Investment, which are controlled by Shenzhen Capital Group, at a total price of 14.7 billion yuan subscribed for 5% of the equity, and the post-investment valuation is about 3 billion yuan. At the end of 2021, Aviave also considered landing on A-shares to raise funds, but after submitting an application for A-share listing guidance and filing to the China Securities Regulatory Commission, there was no further progress.
After Jinxin Reproduction was listed on the Hong Kong stock market in June 2019, the share price was once sharply**, and the market value in 2021 was as high as HK $66 billion, 175% higher than the issue market value**. However, as the biomedical industry enters a cold winter, the market value of Jinxin Fertility has now fallen to about HK$8 billion.
In contrast, Aviave is slightly inferior in terms of the number of patients, the layout of the city and the level of technology licenses, and if the current price-earnings ratio of Jinxin Fertility is 48 times, the market value of Avieve may reach 32500 million yuan, slightly higher than the post-investment valuation in 2019. After assisted reproduction is included in the medical insurance, whether Jinxin Fertility can usher in rapid development with the blessing of capital remains to be observed by investors.