Aier Eye Hospital Reports Record 2018 Results: Revenue Exceeds RMB 8 Billion, Net Profit Surpasses RMB 1 Billion

VCBeat (WeChat: vcbeat) has learned that on the 27th, Aier Eye Hospital released its 2018 preliminary earnings report. The company’s revenue and net profit both hit new highs. During the reporting period, it achieved revenue of RMB 8.015 billion, a year-on-year increase of 34.42%; net profit attributable to shareholders of the listed company reached RMB 1.009 billion, up 35.82% year on year; and net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses amounted to RMB 1.088 billion, representing a year-on-year increase of 40.20%.

Chen Bang, Chairman of the Company, stated that in 2018, Aier Eye Hospital achieved remarkable results in multidisciplinary collaborative development, integration of medical practice, education, and research, expansion of its tiered chain network, upgrading of service systems, and partner incentive programs. The Company’s brand influence continued to strengthen, its leading market position was further consolidated, and its market share steadily increased. Meanwhile, as the operational scale continued to expand, the Group’s chain operation efficiency was continuously optimized, resulting in numerous highlights in operating performance.

Notably, while steadily gaining public trust, the company has made significant progress in building its talent pipeline. Last year, a large number of top-tier ophthalmology experts across China joined the company in succession, marking a substantial rise in its industry standing and the comprehensive appeal of its platform, thereby laying a solid foundation for the successful achievement of its new three-year strategic goals for 2018–2020.

As Aier Eye Hospital’s flagship offering, the refractive surgery businesses at multiple hospitals now generate annual revenues exceeding RMB 100 million, with more than ten hospitals reporting annual refractive surgery revenues above RMB 50 million. Wu Shijun, the company’s Board Secretary, stated that the concurrent growth in patient volume and average pricing is driven by two factors: first, the company’s globally leading technology enables personalized services under the “Global Wisdom, End-to-End Customization” framework, with the proportion of high-end procedures such as SMILE (Small Incision Lenticule Extraction) and ICL (Implantable Collamer Lens) continuing to rise; second, through its “Reputation Goldmine Initiative,” the company has steadily enhanced its brand reputation, with positive word-of-mouth attracting a large number of patients.

An industry expert stated that, after prolonged scrutiny, the favorable visual outcomes of refractive surgery have gained widespread social recognition, with demand transitioning from “elective” to “essential.” Meanwhile, the dual drivers of technology and brand strength will concentrate the industry landscape among leading ophthalmic hospitals. Although there are over 450 million myopic individuals aged 18 and above in China, the refractive surgery rate remains far lower than that in developed countries, indicating substantial room for growth.

Aier Eye Hospital has established a “trinity” myopia prevention and control system integrating preventive measures, examination technologies, and treatment techniques, providing comprehensive myopia management solutions from the perspective of binocular visual function. In recent years, Aier Eye Hospital’s optometry services have maintained rapid growth, demonstrating significant technological advantages.

The company stated that optometry has become a "blockbuster service" for many of its hospitals, with the annual optometry revenue at Shenyang Aier, Wuhan Aier, and Changsha Aier each surpassing RMB 100 million. As the network of optometry outpatient clinics and "Ai Yan e-Stations" continues to expand and mature, patient accessibility to medical care and the company’s market penetration rate will further increase. Meanwhile, the proportion of high-end products with significant clinical efficacy continues to rise, driving year-on-year growth in the average transaction value per customer and steadily increasing the patient "repeat prescription rate."

In 2018, the Ministry of Education and seven other ministries jointly issued the Implementation Plan for Comprehensive Prevention and Control of Myopia in Children and Adolescents, which will further promote efficient coordination between hospitals and schools, ushering in a golden period of opportunity for the industry.

Due to medical insurance cost-control measures in certain regions, the cataract business across the entire ophthalmology industry has been temporarily impacted. According to industry analysts, although total national medical insurance expenditures have actually increased year by year, the current “cage-swapping” adjustment in expenditure structure—replacing low-value services with high-value ones—will generally benefit the ophthalmology sector, which is primarily driven by technical services. This shift will also accelerate industry consolidation. In the long run, the market share of ophthalmic hospitals with comprehensive disciplinary development, diversified revenue structures, and strong medical capabilities is expected to further increase.

Wu Shijun stated that in 2018, the company actively “changed channels,” achieving significant results in expanding cataract patient acquisition channels and optimizing and upgrading medical services. On one hand, the transition from community screening to member engagement, referrals by post-operative patients, and ophthalmic health education activities significantly improved the rate of patient visits driven by word-of-mouth. On the other hand, through the branding of the “Huanjing” service package, the company leveraged high technology, high standards, and a systematic approach to lead cataract treatment into a new era of precise refractive surgery, resulting in continuous improvements in post-operative outcomes and patient satisfaction, which fully demonstrated the trend of consumption upgrading in healthcare services.

A renowned ophthalmology expert believes that cataract treatment is an essential need; current medical insurance cost-containment measures will only delay, not eliminate, such consumption. By the end of 2018, China’s cataract surgical rate (CSR) per million population was only about one-quarter of that in developed countries. Coupled with China’s gradually aging population and the elderly’s higher demands for visual quality, the market potential for cataract care will undoubtedly continue to expand.

On February 19, 2019, the National Development and Reform Commission (NDRC) and 17 other departments jointly issued a document to encourage private investment in healthcare. Eight specialties, including ophthalmology, were designated as key areas for development. The document explicitly called for accelerating the creation of a cohort of competitive branded service providers, encouraging capable private medical institutions to target medical frontiers, assemble teams with disciplinary advantages, and deliver medical services characterized by advanced technologies.

As the external environment becomes more favorable, Aier Eye Hospital has attracted long-term holdings from a large number of institutional investors, with overseas investors continuously increasing their stakes. In addition to a significant presence of QFII, the current shareholding via Stock Connect (Northbound Trading) has reached 160 million shares, accounting for 6.69% of the company’s total share capital.

Source: Aier Eye Hospital Investor Relations