| Valuation method | Value, HK$ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 28.40 | 956 |
| Intrinsic value (DCF) | 2.62 | -3 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 3.20 | 19 |
Chaoju Eye Care Holdings Limited is a leading ophthalmic healthcare provider operating a network of specialized eye hospitals and optical centers across China. Founded in 1988 and headquartered in Beijing, the company delivers comprehensive eye care services including refractive and presbyopia correction, myopia control, cataract treatments, glaucoma management, and various other ophthalmic disorders. With 17 ophthalmic hospitals, 24 optical centers, and 2 clinics strategically located across Zhejiang, Jiangsu, Shanxi, Hebei provinces and Inner Mongolia, Chaoju Eye Care serves the growing demand for specialized eye care in China's rapidly expanding healthcare market. The company operates in both consumer ophthalmic services and basic ophthalmic treatments, positioning itself as a full-service provider in China's burgeoning private healthcare sector. As China's population ages and myopia rates continue to rise, Chaoju Eye Care is well-positioned to capitalize on the increasing demand for specialized eye care services.
Chaoju Eye Care presents a compelling investment opportunity in China's growing private healthcare sector, though with notable risks. The company demonstrates solid financial performance with HKD 1.41 billion in revenue and HKD 195 million net income, translating to a healthy profit margin of approximately 14%. With HKD 781 million in cash and equivalents against HKD 218 million in debt, the company maintains a strong balance sheet. The dividend yield of approximately 4.3% (based on current market cap) provides income appeal. However, investors should consider the regulatory risks inherent in China's healthcare sector, potential competition from both private and public providers, and the company's regional concentration in northern China. The low beta of 0.516 suggests relative stability compared to the broader market, but growth prospects depend on successful expansion beyond current geographic markets.
Chaoju Eye Care operates in a highly competitive Chinese ophthalmic market characterized by fragmentation and rapid consolidation. The company's competitive advantage stems from its established regional presence in northern China, multi-decade operating history since 1988, and comprehensive service offering spanning both medical treatments and optical products. Unlike pure-play optical retailers, Chaoju's hospital network allows for higher-margin surgical procedures and complex treatments. However, the company faces intense competition from larger national chains like Aier Eye Hospital, which has significantly greater scale and geographic coverage. Chaoju's regional focus provides deep local market knowledge but limits economies of scale compared to national competitors. The company's strategy of operating both hospitals and optical centers creates cross-selling opportunities but requires significant capital investment. In the rapidly consolidating Chinese healthcare market, Chaoju's mid-size position makes it both a potential acquisition target and vulnerable to competitive pressures from larger players. The company's challenge lies in balancing expansion with profitability while maintaining service quality standards in a market where brand reputation is increasingly important.