New Stock News | AVA Holdings files for a second listing on the Hong Kong Stock Exchange, focusing on providing ART and related services.

According to the disclosure on September 13 by the Hong Kong Stock Exchange, AVA IVF Hospital Management Group Limited (referred to as "AVA IVF") has submitted an application for listing on the main board of the Hong Kong Stock Exchange, following its failed submission on December 22, 2023. CITIC SEC is its exclusive sponsor. The prospectus shows that AVA IVF is a Chinese assisted reproductive technology (ART) and auxiliary service provider. Through its four authorized hospitals in Guangdong Province, Tianjin City, and Yunnan Province, the company focuses on providing ART and auxiliary services in many regions of China, attracting infertile patients from 15 surrounding provinces, autonomous regions, and municipalities. According to data from Frost & Sullivan, in 2023, the company's hospitals ranked fourth among private ART service providers in China, conducting a total of 7848 IVF cycles, accounting for about 1% of the total number of IVF cycles performed in China that year. According to the same source, the Chinese ART and auxiliary service market is relatively fragmented, with the top five ART and auxiliary service providers collectively holding around 16.5% of the total market share. In recent years, the incidence of infertility among Chinese couples has been increasing, and the penetration rate of ART services is low, leading to a significant market opportunity. For over a decade, the company has been focusing on providing ART and auxiliary services. With its internationally recognized medical technology and equipment, the company is able to provide patients with the services they need. According to Frost & Sullivan data, the company has solidified its market position by maintaining success rates and live birth rates (two key indicators of treatment quality for ART service providers recognized by the industry). In 2022 (the most recent year for which national industry data is available), the company's hospitals achieved average success rates of 57.2% and live birth rates of 45.7%, significantly higher than the industry average of 51.6% and 41.1%, respectively. ART treatment includes two main solutions: (i) artificial insemination (AI) using husband's sperm (AIH) or donor sperm (AID); and (ii) in vitro fertilization and embryo transfer (IVF-ET), which involves conventional IVF or intracytoplasmic sperm injection (ICSI) to achieve fertilization, as well as pre-implantation genetic testing (PGT) for embryo genetic disease diagnosis or screening during the process. All of the company's hospitals are able to perform AIH, conventional IVF, and ICSI for patients. The company considers the patient's medical history, evaluates their fertility capacity, and determines the cause of infertility to provide a suitable treatment plan. Patients who meet the conditions for AIH treatment will initially undergo AIH, and if previous AIH treatment fails, they will then switch to IVF-ET treatment. Therefore, a patient may receive both AIH and IVF-ET treatment at the company's hospitals. During the reporting period, most of the company's patients underwent IVF-ET treatment, with 950 patients receiving IVF-ET treatment after AIH treatment failure. Due to strict regulations in China and the time-consuming process of obtaining approvals, PGT technology is not widely used for ART services in China. The company also provides various auxiliary medical services to support the AIH and IVF-ET treatment processes. These services include customized treatment plans for patients with underlying diseases that may affect reproduction, assistance with pre-ART treatment physical conditioning, and other obstetric services. The company's service solutions include gynecological disease treatment, traditional Chinese medicine therapy, integrative medicine applications, and related Chinese medicine and health products. The company's auxiliary medical services also include psychological support, nutritional guidance, weight loss consultation, and other support services to improve the overall physical and mental health of patients and enhance success rates in subsequent ART treatments. Financially, the company's revenue generated from ART and auxiliary services increased from RMB 420 million in 2021 to RMB 494 million in 2023, with a compound annual growth rate of 8.5%, and increased 8.7% from RMB 230 million in the six months ended June 30, 2023, to RMB 251 million in the six months ended June 30, 2024. The company maintained relatively high gross profit margins in 2021, 2022, and 2023, as well as in the six months ended June 30, 2023, and June 30, 2024, at 45.9%, 43.3%, 44.4%, 43.5%, and 44.3%, respectively.