Gaush Meditech Advances Toward Hong Kong IPO, Tapping into China's Billion-Dollar Ophthalmic Medical Device Market
From November 30 to December 5, Gaush Meditech Ltd. (Stock Code: 02407.HK), a leading domestic supplier of ophthalmic medical devices, opened its subscription period, marking the final sprint toward its initial public offering (IPO) in Hong Kong.
As a leading enterprise in China’s ophthalmic medical device industry, Gaoshi Medical has established strong competitive advantages through its diverse product portfolio, outstanding technical service capabilities, and growing R&D strength. Facing the vast blue-ocean market of ophthalmic medical devices in China, valued at hundreds of billions of yuan, Gaoshi Medical will leverage the capital market platform after its upcoming IPO to further increase R&D investment, enhance its comprehensive competitiveness, and seize development opportunities in the ophthalmic medical device sector.
Public information indicates that, as a pioneer in China’s ophthalmic medical device industry, Medtronic Ophthalmics (Gao Shi Medical) offers medical device products covering all seven ophthalmic subspecialties for diagnosis, treatment, and surgery. The company provides one-stop ophthalmic medical device solutions to more than 4,000 end customers across all provincial-level administrative regions of China. Its portfolio includes ophthalmic diagnostic equipment, surgical and therapeutic devices, and consumables, complemented by after-sales technical services.
In China’s ophthalmic medical device market, High Vision Medical holds a prominent leading position. According to data disclosed by Frost & Sullivan, High Vision Medical is the largest domestic enterprise in China’s ophthalmic medical device market by market share, with a share of 6.7%. Measured by 2021 revenue, it ranks as the fourth-largest company in this market, including foreign-funded enterprises, with an annual revenue of RMB 1.298 billion in 2021.
Whether in terms of product portfolio or technical services, High Vision Medical possesses a distinct competitive advantage:
On one hand, High Vision Medical boasts a diverse and stable product portfolio that covers a wide range of ophthalmic diagnostics and treatments, along with a multi-channel sales network across China and an established network of key opinion leaders (KOLs) in ophthalmology. Meanwhile, High Vision Medical has partnered with 19 global brand partners, 16 of which have entered into exclusive distribution agreements for their products, including Heidelberg, Schwind, and Optos.
Notably, in recent years, the proportion of High Vision Medical’s proprietary products has gradually increased through independent research and development as well as expansionary mergers and acquisitions. In particular, following the acquisitions of Roland and Taijing in 2020 and 2021, respectively, the share of revenue from High Vision Medical’s proprietary products rose from 1.1% in 2019 to 3.0% in 2020 and 28.0% in 2021, further increasing to 29.5% in the first half of 2022.
On the other hand, Gaoshi Medical possesses exceptionally strong technical service capabilities. Based on revenue from technical services and the number of in-house maintenance engineers, Gaoshi Medical was the largest domestic provider in China’s ophthalmic device technical service market in 2021, ranking as the second-largest service provider across the entire market. In 2019, 2020, and 2021, Gaoshi Medical generated RMB 108 million, RMB 139 million, and RMB 162 million in revenue from technical services, respectively. When categorized by business nature rather than solely by “product” attributes, the proportion of revenue from Gaoshi Medical’s proprietary businesses (technical services plus own-brand product sales) has exceeded 40%.
Moreover, High Vision Medical’s ever-growing R&D capabilities have further strengthened its advantages in product portfolio and technical services.
In particular, through acquisitions, Aier Eye Hospital inherited Tai Liang’s over 20 years of R&D experience in intraocular lenses (IOLs), world-leading IOL R&D resources, platforms, and core intellectual property rights, as well as Roland’s electrophysiological equipment R&D capabilities. The company integrated Roland’s R&D team with its own R&D team in China. To date, the company has registered 10 invention patents and 16 utility model patents in mainland China, and 83 patents in Hong Kong, the European Union, and other regions. Correspondingly, Aier Eye Hospital has continuously increased its R&D investment in recent years. From 2019 to 2021, its R&D expenses rose from RMB 2.7 million to RMB 23.5 million. In the first half of 2022 (ended June 30), R&D expenses reached RMB 22.42 million, up from RMB 9.38 million in the same period of 2021, representing a year-on-year increase of nearly 140%.
Driven by its extensive product portfolio, superior technical service capabilities, and growing R&D strength, Gaoshi Medical has achieved steady performance growth in recent years. According to the prospectus, Gaoshi Medical’s revenue reached RMB 1.107 billion, RMB 962 million, and RMB 1.298 billion in 2019, 2020, and 2021, respectively; gross profit amounted to RMB 463 million, RMB 436 million, and RMB 610 million, respectively; and adjusted net profit stood at RMB 135 million, RMB 163 million, and RMB 209 million, respectively, maintaining a consistent upward trend.
In particular, Aier Eye Hospital’s profitability has continued to improve, with its gross profit margin rising from 41.9% in 2019 to 45.3% in 2020, and further increasing to 46.9% in 2021. Behind this improvement, the company’s product mix has been continuously optimized, with the revenue share of higher-margin ophthalmic medical consumables increasing from 13.4% in 2019 to 14.6% in 2020, 31.5% in 2021, and 35.7% in the first half of 2022.
Amid the vast blue ocean of ophthalmic medical devices, Gaoshi Medical’s growth prospects are widely favored by the market.
From a longitudinal perspective, the market prospects for ophthalmic medical devices are exceptionally broad. Data shows that the global ophthalmic medical device market grew from $21.5 billion in 2017 to $26.8 billion in 2021. Driven by an expanding patient population and advancements in technology, the global market size for ophthalmic medical devices is projected to reach $40.7 billion by 2025 and $56.4 billion by 2030.
Among these, the Chinese ophthalmic medical device market grew from RMB 9.2 billion in 2017 to RMB 16.3 billion in 2021, with a compound annual growth rate (CAGR) of 15.5%, outpacing the global ophthalmic medical device market. Over the next five years, the Chinese ophthalmic medical device market is expected to achieve even higher growth, with the market size projected to reach RMB 30.4 billion by 2025 and RMB 51.5 billion by 2030.
From a horizontal perspective, the development potential of China’s ophthalmic medical device market remains substantial. Due to scarce medical resources and limited patient awareness, the penetration rate of ophthalmic healthcare services in China has long been constrained. According to Frost & Sullivan, in 2021, the patient base for major ophthalmic diseases in China was approximately 1.7 to 11 times that of the United States; however, the U.S. ophthalmic medical device market is currently significantly larger than China’s. This indicates a vast unmet patient demand in China’s ophthalmic sector, suggesting considerable growth potential for the ophthalmic medical device market.
As an industry leader, High Vision Medical will fully capitalize on the growth dividends of the ophthalmic medical device market by leveraging its strong comprehensive competitive advantages. In particular, following its future listing, the company will further increase R&D investment, enhance technological capabilities, optimize its product portfolio, and strengthen technical service capacities by relying on the capital market platform, thereby seizing development opportunities in the ophthalmic medical device market.
GaoShi Medical’s commitment to continuously increasing its R&D investment is also evident from the use of proceeds raised.
According to the prospectus, the funds raised by Gaoshi Medical will be used to enhance the company’s R&D capabilities and accelerate the commercialization of its patents within two years; upgrade intraocular lens (IOL) products and strengthen R&D capabilities for hydrophobic and hydrophilic materials used in IOL manufacturing; conduct R&D and production of comprehensive ophthalmic diagnostic equipment (including optometry devices and electro-ophthalmology equipment); and carry out R&D and production of high-value ophthalmic consumables (such as orthokeratology lenses) and ophthalmic surgical consumables, among other initiatives.
Furthermore, to promote long-term growth, High Vision Medical stated that it will implement the following key strategies in the future: improving the composition of its product portfolio, expanding the range of proprietary products, and optimizing collaborations with brand partners to further consolidate its market position; enhancing value-added solution capabilities to increase customer stickiness and satisfaction, while continuing to focus on the needs of ophthalmic patients and the Chinese ophthalmic medical device market; consolidating its market position in China and expanding its global footprint through organic growth and strategic partnerships, thereby achieving balanced development of domestic and overseas businesses; and attracting and training international talent while reducing turnover rates. As a company continuing to focus on the premium ophthalmology sector, High Vision Medical will also continuously improve its management standards to enhance comprehensive competitiveness, solidify its leading position, and drive industry development.