Summary of Aier Eye Hospital Conference Call Company Overview - **Company**: Aier Eye Hospital (300015.SZ) - **Industry**: Healthcare, specifically ophthalmology services Key Points Refractive Business Performance - The refractive business experienced lower-than-expected volume growth, but the Average Selling Price (ASP) increased due to a higher mix of premium procedures [1][3] - Premium procedures now account for approximately 40% of total refractive surgeries, contributing to stable pricing and reduced price competition [6][9] - The company noted a year-over-year growth of about 10% in the first three quarters and October, primarily driven by premium surgical procedures [6] Cataract Business Challenges - The cataract business faced significant pressure, with volumes declining by high-single to low-double digits, despite stable revenue due to the acquisition of 87 hospitals [7][9] - ASP for cataract procedures rebounded by approximately 5-6% year-over-year, driven by increased adoption of functional lenses and self-pay procedures [7] - The company is promoting functional lenses and self-pay projects to mitigate reliance on medical insurance, although this transition will take time [7] Financial Outlook - The company anticipates short-term margin pressure due to new hospital costs and rising labor expenses, with gross and net margins expected to remain flat or slightly decline [8] - Aier Eye Hospital is focusing on operational optimization and expansion of self-pay services to achieve steady growth [8] - The company has designated the next three years as "years of execution," emphasizing refined operations and profitability recovery [8] Investment Thesis - Aier Eye Hospital is positioned to capture increasing demand from the 50+ demographic, particularly in premium and out-of-pocket treatments [9] - The current valuation is seen as offering an attractive risk-reward profile, with a target price of Rmb15, representing a 24.5% upside from the current price of Rmb12.05 [2][12] Risks - Key risks include a slower-than-expected premiumization trend in cataract surgery, intensifying price competition in refractive surgery, and potential pricing pressure from policies related to OK lenses [12] Additional Insights - The company is optimistic about future growth despite acknowledging the challenging macroeconomic environment in China [8] - The share of public service applicants in refractive surgeries has increased to about one-third, indicating a shift in patient demographics [6] This summary encapsulates the critical insights from the conference call, highlighting the performance, challenges, and strategic outlook of Aier Eye Hospital in the ophthalmology sector.