MVF - Monash IVF Group

[johnpendles]

Fast becoming more women's health and less of IVF/ARS, although that is still it's core by quite some margin.

And I like this, as has been noted previously in this thread, ARS has proven to be a bit more cyclical/price-sensitive than many of us thought to be the case. By adding on additional revenues outside of the ARS sector, one would assume that the company is becoming less and less dependent on ARS. However, as you said, at it's core, its still an ARS company.

 

[DeepState]

And I like this....

Regulatory risk for Australian ARS is the key event risk that is basically not able to be hedged. This move, together with the Asian expansion, highlights how MVF is moving fast to reduce the exposure to regulatory risk in the Australian market.

My ok-to-hold valuation made allowance for this risk and high beta.

 

[johnpendles]

What do you mean by "regulatory risk" ?

 

[DeepState]

What do you mean by "regulatory risk" ?

Eg. Medicare rebate for various items related to IVF get halved....

 

[DeepState]

Need to look into developments in FET. I don't understand it sufficiently.

This from the H1 2015 Investor presentation:



Why is it that FET is increasing in the mix?
What do they mean by "ongoing change in clinical practice" that leads to this development?
How does this impact the number of IVF cycles undertaken?

Any assistance gratefully received.

 

[DeepState]

JP, I am hearing that PRY is establishing a Melbourne presence.
What do you think of the PRY service model?

 

[McLovin]

Hey DS

Did you see this in the AFR?

Doctors at Monash IVF have demanded a meeting with the board, chaired by Richard Davis, on August 31, following the resignation of two senior embryologists Tiki Osianlis and Maria Diamente.

"When conscientious and committed staff feel they have no other option than to resign from a job they have given so much to, it indicates something is fundamentally wrong," says a letter to the board signed by 29 doctors and obtained by The Australian Financial Review.

"We share their [the embryologists] concerns that… Monash IVF Group seems intent on moving away from what all of us have considered to be core Monash IVF values for a long time."

Associate professor Luk Rombauts, Monash IVF's research director, and associate professor Beverley Vollenhoven, two of the signatories to the letter, also met with the company earlier this month.

It is understood the doctors want to have a more of a role in vetting policies that could impact on patients, be consulted when prices are raised for IVF treatments and stop the hire of new IVF specialists.

http://www.afr.com/business/health/...ething-is-fundamentally-wrong-20150820-gj3gxt

Who has the balance of power here?

 

[johnpendles]

Need to look into developments in FET. I don't understand it sufficiently.

This from the H1 2015 Investor presentation:

View attachment 62847

Why is it that FET is increasing in the mix?
What do they mean by "ongoing change in clinical practice" that leads to this development?
How does this impact the number of IVF cycles undertaken?

Any assistance gratefully received.

PM me your questions

 

[johnpendles]

nice pop today

DS what did u make of earnings report?

 

[McLovin]

I was having a think about the implications for the end of the one child policy. The way wealthy Chinese buy up Australian baby formula got me thinking, will wealthy Chinese couples come to Australia to get their IVF done here because of better regulation etc? I don't know whether the answer is yes or no, just something that I think might have the potential to really benefit guys like MVF.

Anyone?

 

[Ves]

I was having a think about the implications for the end of the one child policy. The way wealthy Chinese buy up Australian baby formula got me thinking, will wealthy Chinese couples come to Australia to get their IVF done here because of better regulation etc? I don't know whether the answer is yes or no, just something that I think might have the potential to really benefit guys like MVF.

Anyone?

Here's an article you might find interesting.

http://www.cnbc.com/2015/11/30/end-of-one-child-policy-means-mayhem-in-chinas-ivf-sector.html

Basic premises:

It is hard to get through the hoops and for both operators and patients and conduct IVF services in China.

There's expected to be rising demand in China.

Yes, Chinese couples do already look overseas.

Article mentioned that between 30-40% of Monash and Virtus' existing patients already come from China. Potential for this to increase.

 

[McLovin]

Here's an article you might find interesting.

http://www.cnbc.com/2015/11/30/end-of-one-child-policy-means-mayhem-in-chinas-ivf-sector.html

Basic premises:

It is hard to get through the hoops and for both operators and patients and conduct IVF services in China.

There's expected to be rising demand in China.

Yes, Chinese couples do already look overseas.

Article mentioned that between 30-40% of Monash and Virtus' existing patients already come from China. Potential for this to increase.

Thanks, mate. The link is dead though.

Edit: Now it works...

 

[Ves]

Thanks, mate. The link is dead though.

Sorry, check the edit. Didn't copy the first time.

 

[skc]

I was having a think about the implications for the end of the one child policy. The way wealthy Chinese buy up Australian baby formula got me thinking, will wealthy Chinese couples come to Australia to get their IVF done here because of better regulation etc? I don't know whether the answer is yes or no, just something that I think might have the potential to really benefit guys like MVF.

Anyone?

Mainland Chinese mothers have been going to HK to give birth there for quite some time, causing a lot of stress on the system and discontent among the locals.

Interesting that there's already a large percent of Chinese IVF tourism. I wouldn't have thought that to be the case, given that Australia is a long way away and not exactly cheap. IVF treatments can be multi-cycle and so can take anywhere from 6 weeks to months and years... so somewhere closer might be easier.

Then again, can't argue with the figures.

 

[johnpendles]

, will wealthy Chinese couples come to Australia to get their IVF done here because of better regulation etc?

Anyone?

No they won't. IVF services in China are of a high quality, although supply for services will be tight in the short term. No need at all to come here.

 

[johnpendles]

Article mentioned that between 30-40% of Monash and Virtus' existing patients already come from China. Potential for this to increase.

It said that 30-40% of patients going to Superior A.R.T in Thailand are from China.


With no one child policy, demand for IVF services will certainly ramp up for China. I am not sure that will translate to a significant number of people coming to Australia for treatment though.

 

[DeepState]

nice pop today

DS what did u make of earnings report?

Apologies for the delay in response, especially given how very helpful your experience has been. Have not reviewed in detail. Initial observations on surface read:

Market pleasantly surprised by evidence of reversion to long term ARS growth rate. Has been tracking unreasonably low since IPO.
Clearly responding positively to expectations for FY16 reported NPAT to be +25% although revisions to expectations did not come though. FactSet is tracking 6 analysts. One revised up, one down and average didn't do anything. Analysts are not giving credence to the stated outlook. Possible upside surprise and credibility restoration if the target can be hit.

There are significant margin pressures in KL.
Low intervention is lower margin off lower revenue. Will eventually bite into main line offering. What rate of revenue and EBITDA compression will occur?
Beginning to grow further away from core IVF by moving to complementary services (day care hospitals, SUFW) and having to engage in pre-emptive self cannibalisation (Bump, MyIVF).
Fair chunk of headline growth is via acquisition. Need to check pricing achieved and hence price for growth.
Suspect that increasing supply of IVF specialists offers upside via increasing share of revenue retained.

Lots of questions unanswered at this time. Just first impressions.

 

[Ves]

It said that 30-40% of patients going to Superior A.R.T in Thailand are from China.

Thanks for that, after reading it a second time it looks like you might be right. The sentence structure itself is a bit misleading, and they could probably do with a full stop and a separate sentence.

 

[McLovin]

Interesting article, Ves.

No they won't. IVF services in China are of a high quality, although supply for services will be tight in the short term. No need at all to come here.

So why do couples go overseas now? The article infers that aside from gender selection/surrogacy, it's a the regulations that apply in China. Do you have any idea of the breakdown of Chinese couples going overseas for IVF currently? TIA.

 

[johnpendles]

Interesting article, Ves.


So why do couples go overseas now?

Im not sure why couples would leave China to seek treatment in another country. I'm not familiar with their regulations. But for 30-40% of patients of a Thai clinic to be traveling Chinese seeking treatment, there must be something going on.

My guess is gender selection.


There is no doubt that IVF services will see a huge increase in demand in China. The question for me is not if patients from China will come to Australia, but will MVF look to expand their operations into China?