Summary of Aier Eye Hospital Group Conference Call Company Overview - **Company**: Aier Eye Hospital Group - **Ticker**: 300015.SZ - **Industry**: China Healthcare - **Market Cap**: Rmb118,098 million - **Current Share Price**: Rmb12.66 (as of July 22, 2025) - **Price Target**: Rmb11.50, indicating a downside of 9% from the current price [4][67] Key Financial Insights - **Revenue Growth**: Expected single-digit percentage revenue growth in 1H25, with faster net profit growth anticipated due to acquisitions [3][4] - **Gross Profit Margin (GPM)**: Overall GPM expected to increase year-over-year due to refractory average selling price (ASP) upgrades and ramping of injected hospitals, offsetting GPM pressure in the cataract segment [3][7] - **Net Profit Growth**: Expected to benefit from prudent marketing and operational expense controls [3] Segment Performance - **Refractory Segment**: - Revenue growth projected to be slightly positive in 1H25, with ASP expansion of over 10% year-over-year due to technology upgrades (e.g., SMILE 4.0, SMILE Pro) [7] - Volume decline anticipated due to seasonal and cyclical headwinds [7] - **Cataract Segment**: - Growth could turn negative in 2Q25 due to increased reimbursement pressure and ASP challenges from Value-Based Purchasing (VBP) [7] - **Optometric Segment**: - Stable growth expected in 1H25, with faster growth in de-focal lenses compared to ortho-k lenses [7] Market Dynamics - **Macro Environment**: - Anticipated softer performance in 2Q25 compared to 1Q25 due to macroeconomic pressures and reimbursement challenges [3][7] - **Overseas Growth**: - Faster growth of over 10% in 1H25, aided by UK hospital acquisitions in 2024 [7] Strategic Outlook - **Expansion Plans**: - Company intends to slow down expansion amid macroeconomic uncertainties and does not foresee M&A activities in the near future [7] - **Shareholder Returns**: - Aier remains committed to returning value to shareholders despite the challenging environment [7] Risks and Considerations - **Upside Risks**: - Recovery in demand for ophthalmology services, faster ramp-up of new hospitals, and potential for accelerated M&A [10] - **Downside Risks**: - Increased competition, tightened government policies, and potential medical disputes impacting growth and margins [10] Valuation Methodology - **Valuation Approach**: Discounted cash flow (DCF) with a WACC of 8.5% and a perpetual growth rate of 3% [8] Conclusion Aier Eye Hospital Group is navigating a challenging macroeconomic landscape with mixed performance across its segments. While growth is expected to be slower in the short term, strategic focus on operational efficiency and prudent marketing may support net profit growth. The company’s commitment to shareholder returns and cautious expansion strategy will be critical in the coming quarters.