UOB Kay Hian
Report Date: August 27, 2025
Aier Eye Hospital Group: Strong 1H25 Results and Robust Growth Prospects Amid Challenging Market Conditions
Executive Summary
Aier Eye Hospital Group (300015 CH), the world’s largest ophthalmic medical service provider, reported satisfactory first-half 2025 results, reflecting resilience despite a challenging economic environment. With revenue and adjusted net earnings both beating expectations, Aier continues to expand aggressively both in China and overseas, leveraging its strong network, service upgrades, and innovative strategies such as AI. The company is maintaining a bullish outlook, targeting a significant increase in overseas revenue and further improvements in service capabilities and operational efficiency.
Company Overview
Sector: Health Care
Bloomberg Ticker: 300015 CH
Shares Issued: 9,325.4 million
Market Cap: RMB 128,970.2 million (US$18,024.4 million)
3-Month Avg. Daily Turnover: US$133.2 million
52-Week High/Low: RMB19.09 / RMB9.05
Major Shareholders:
Mr. CHEN Bang: 43.0%
Mr. LI Li: 10.3%
1H25: Financial Performance At a Glance
| Metric |
2Q24 |
2Q25 |
YoY % Change |
1H24 |
1H25 |
YoY % Change |
| Revenue (RMBm) |
5,349 |
5,481 |
+2.5% |
10,545 |
11,507 |
+9.1% |
| Gross Profit (RMBm) |
2,704 |
2,694 |
-0.4% |
5,214 |
5,588 |
+7.2% |
| EBT (RMBm) |
1,457 |
1,259 |
-13.6% |
2,659 |
2,663 |
+0.1% |
| Net Profit (RMBm) |
1,150 |
1,001 |
-13.0% |
2,050 |
2,051 |
+0.1% |
| Adjusted Net Profit (RMBm) |
942 |
980 |
+4.0% |
1,785 |
2,040 |
+14.3% |
Profitability Ratios (as % of Sales)
Gross profit margin: 49.2% (2Q25), 48.6% (1H25)
Selling expense/revenue: 9.3% (2Q25), 9.1% (1H25)
Administrative expense/revenue: 14.6% (2Q25), 13.5% (1H25)
R&D expense/revenue: 1.4% (2Q25), 1.3% (1H25)
Adjusted net margin: 17.9% (2Q25), 17.7% (1H25)
Key Financial Highlights and Growth Drivers
Resilient Revenue and Volume Growth
Total revenue for 1H25 grew 9.1% YoY to RMB11.5 billion.
Outpatient numbers rose 16.47% YoY to 9.25 million.
Surgeries increased 7.63% YoY to 0.88 million.
All major business segments reported growth.
Management attributes robust demand to the essential nature of eye care, even during economic slowdowns.
Margin Performance and Cost Management
Gross margin slightly declined by 0.9ppt to 48.6% due to lower margins at newly acquired hospitals, higher depreciation from new facilities, and changes in medical insurance policies (e.g., DRG/DIP).
Selling expenses as a percentage of revenue fell by 1.5ppt in 1H25, thanks to effective cost control.
Adjusted net margin improved by 0.8ppt to 17.7%.
Operating Efficiency and AI Innovation
The company is focused on upgrading services and accelerating AI application strategies to further enhance operational efficiency.
Specialties being strengthened include refractive surgery, cataract, optometry, retinal diseases, cornea, and glaucoma.
Expansion into new specialties: orbital diseases, ocular oncology, neuro-ophthalmology, and pathology, aiming for comprehensive, full-lifecycle eye care.
Strategic Initiatives and Global Ambitions
Aier is aggressively expanding its hospital network through M&A and organic growth.
As of June 2025:
355 ophthalmic hospitals and 240 eye care clinics in China.
169 ophthalmic centers and clinics overseas.
Overseas business grew at 18% YoY (compared to 8% domestic), contributing 12.6% of total revenue in 1H25.
Long-term target: Overseas business to contribute 30-50% of total revenue, establishing Aier as a world-class ophthalmology group.
Financial Projections and Valuation
| Year to Dec 31 (RMBm) |
2023 |
2024 |
2025F |
2026F |
2027F |
| Net Turnover |
20,367 |
20,983 |
22,686 |
24,421 |
26,766 |
| EBITDA |
5,984 |
5,373 |
6,228 |
6,797 |
7,566 |
| Net Profit (adj.) |
3,514 |
3,099 |
3,606 |
4,211 |
4,760 |
| EPS (Fen) |
37.7 |
33.2 |
38.7 |
45.2 |
51.0 |
| PE (x) |
36.7 |
41.6 |
35.8 |
30.6 |
27.1 |
| ROE (%) |
18.9 |
18.0 |
18.1 |
17.9 |
18.1 |
| Net Margin (%) |
16.5 |
16.9 |
17.4 |
17.8 |
18.3 |
Target Price: RMB16.70 (DCF-based, WACC 8.9%, terminal growth 4.5%)
Current Price: RMB13.83 (as of report date)
Upside: +20.7%
Dividend yield: 1.1–1.6% (2024–2027F)
Capital Structure and Balance Sheet Strength
Net cash/share (FY25): RMB0.47
Net debt/(cash) to equity: -18.9% (2025F), strengthening to -37.0% by 2027F
Interest cover: 31.1x (2025F), improving to 37.8x by 2027F
Business Risks and Catalysts
Key Risks
Policy uncertainties
Potential negative effects from weaker economic conditions
Expansion risks in both domestic and overseas markets
Stock Price Catalysts
Increased revenue and earnings contributions from newly acquired hospitals
Effective expansion strategy supporting both China and overseas growth
Regional and Segmental Revenue
Domestic and overseas segments both contributed to growth, with overseas business expanding at a faster pace.
Segmental and regional revenue breakdowns reflect a strong and diversified revenue base (specific segmental tables available upon request).
Conclusion: Investment Case Remains Robust
Aier Eye Hospital Group continues to deliver strong operational and financial results, underpinned by resilient demand for ophthalmology services and its aggressive expansion strategy. The company’s focus on service upgrades, AI innovation, and global expansion position it for sustained growth. With a solid balance sheet, improving margins, and a clear path to global leadership, Aier remains a compelling BUY with a DCF-backed target price of RMB16.70, offering investors an attractive upside in the healthcare sector.
