Domestic ophthalmology services are in high demand, and private ophthalmology hospitals have development advantages. According to insight consulting data, the domestic patient base is huge. Along with the increase in health awareness, demand for treatment is gradually being released. From 2015 to 2019, China's ophthalmology service market grew from 50.7 billion yuan to 103.7 billion yuan, with a compound annual growth rate of 19.6%. The private ophthalmology hospital market grew from 18.9 billion yuan to 40.2 billion yuan, with a compound annual growth rate of 20.7%. The private ophthalmology service market is expected to reach 110.3 billion yuan by 2025.

In the new decade, the domestic “1+8+N” strategy is actively and carefully laid out abroad. The “1+8+N” strategy continuously improves the vertical hierarchical chain network system within each province and region and the construction of a horizontal same-city hierarchical diagnosis and treatment network with multiple hospitals in one city in the provincial capital city. As of June 30, 2024, the company has a total of 140 overseas ophthalmology centers and clinics. The overseas business revenue share has remained above 11% in recent years. The overseas market situation is more complicated, and it is not something that can be solved with capital alone. Whether it is politics, economy, culture, or customs, the company needs to explore step by step according to local conditions. The company's overseas layout is both active and cautious. It pursues high-quality development and does not expand in an extensive manner based on the principle of preferring scarcity and refinement.

“hierarchical diagnosis and treatment” business model, “medical education and research” medical training system. The hierarchical chain business model fits the “national dispersion and regional concentration” market pattern of the Chinese ophthalmology medical service industry, and enables mutual referral of patients between hospital chains and the smooth flow of medical technical resources within the system. Any chain hospital can rely on the company's overall strength to participate in local market competition and obtain a “many-to-one” competitive advantage. The company has formed a medical education and research platform composed of professional groups, research institutes, research workstations, engineering research centers, scientific research bases, etc., to continuously improve the output of basic research and clinical research results.

Investment advice: We expect the company to achieve net profit of 3.562/4.156/4.806 billion yuan in 2024-2026, a year-on-year increase of 6.1%/16.7%/15.6%, covering the first time and giving it an “increase in wealth” rating.

Risk warning: macro and industry policy risks; medical malpractice and dispute risks; human resources risks; management risks; public relations crisis risks; brand licensing risks and litigation and arbitration risks; risk of impairment of goodwill, etc.