Key points from this report:
- Buy Jinxin: The stock broke out from a 14-week cup-with-handle base on heavy volume as China changes its existing two-child policy.
- What’s new: On May 31, China changed its child policy, allowing all married couples to have up to three children from the existing limit of two children.
- Leading position in attractive China market: Jinxin is one of three licensed, non-state-owned ARS providers in China that conduct more than 5,000 IVF cycles annually. The ARS market in China is expected to have a CAGR of 15% in 2018–2023, reaching RMB 49.6B. The success rate of Jinxin’s medical facilities is 55%, which outpaces the national average of 45%.
- Business expansion: In 2020, Jinxin expanded its network to Wuhan and Southeast Asian markets by acquiring Wuhan Jinxin Hospital and Jinrui Medical Center in Laos.
- Next catalyst: The company is expected to announce H1 results in August. With the recovery in IVF services, management guided for revenue growth of 20% for 2021.