EuroEyes

Investment Rating - The report maintains a "Buy" rating for EuroEyes (01846.HK) with a target price of HKD 6.92, indicating an upside potential from the current price of HKD 5.36 [4][11][20]. Core Insights - EuroEyes' overall performance in 2023 slightly fell short of expectations due to operational challenges at the London Vision Clinic and delayed clinic openings in Hong Kong and Germany. Despite this, demand for presbyopia correction treatments remained strong, leading to a 37.1% increase in lens exchange surgery revenue to HKD 371.8 million [7][11]. - The aging demographic is expected to drive demand for trifocal lens exchange surgery, which is anticipated to be a key growth driver for the company. The Knightsbridge clinic is projected to reach breakeven within 6 to 9 months, while the Hong Kong flagship clinic may take 1 to 2 years [8][11]. - The company plans to open new clinics in Kiel and Wiesbaden, Germany, by the end of the first half of 2024, and will also construct consultation centers in Beijing and Shanghai to enhance existing surgical center utilization [9][11]. - EuroEyes is pursuing an aggressive M&A strategy with a budget of HKD 500 million to acquire established practices in Europe, America, and Asia Pacific, aiming to complete these acquisitions within 24 months [11][19]. - The company has initiated a share buyback program to repurchase up to 3% of its outstanding shares, reflecting confidence in its future prospects [11]. Financial Performance - EuroEyes achieved a record turnover of HKD 714.3 million in 2023, marking a 17.0% year-on-year increase. Adjusted gross profit rose by 23.2% to HKD 339.4 million, with a gross profit margin of 47.5% [16][47]. - The adjusted net profit surged by 40.0% year-on-year to nearly HKD 141.7 million, resulting in a net profit margin of 19.8% [16][47]. - Revenue is projected to grow to HKD 842.7 million in 2024, with a year-on-year growth rate of 18.0% [47].