Investment Summary

Aier is a leading ophthalmic medical chain in China and even in the world. It operates more than 330 ophthalmic medical institutions worldwide, with total revenue amounting to RMB5.9bn and net profit reaching RMB790mn in 2017. We highlight that the company 1) expands through both horizontal extension and vertical sinking of hospital network, 2) increases employee motivation with equity incentive programs and vigorously cultivates medical talents, and 3) actively explores the international and mobile medical fields. We expect FY18E/19E revenue to achieve yoy growth of 35%/30%, and initiate 12-mon TP of RMB35.2 with target PE 50x, BUY rating. (Closing price at 18 Sep 2018)

Business Overview

Aier, established in 2003 was listed on Shenzhen Exchange in 2009 (300015SZ). By 2018, Aier has built more than 250 professional ophthalmic hospitals in over 30 Chinese provinces and cities, covering more than 70% of the national medical insurance population and serving over 6.5 million outpatients annually. The company is committed to the parallel introduction and absorption of world-leading ophthalmic technology and management concepts, with professionalism, scale and science as its strategy. Aier has bridged all three areas of medicine, education and research, the establishment of these educational and research institutions is expected to boost research and clinical standards. Also, the company focuses on international development, given it operates more than 80 ophthalmic medical institutions in US, Europe and Hong Kong through investment holding.