The leading Chinese chain of private eye hospitals is aiming to boost its brand visibility and widen its funding options, but will it be able to justify a juicy premium?

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Key Takeaways:

• Stiff competition and price pressure in China have curbed revenue growth, prompting the company to target international eyecare markets
• Income from its overseas eye clinics rose around 16% last year, more than double the overall rate of revenue growth

After rapid growth, Chinese private hospital chains have been falling out of favor on equity markets as they compete for customers by cutting prices.

But the country's leading private network of specialized eye hospitals is looking to reframe that narrative, with a move to raise its international profile and boost its overseas presence.

The board of Aier Eye Hospital Group Co. Ltd. (300015.SZ) voted on April 23 to pursue a listing on the main board of the Hong Kong Stock Exchange, subject to shareholder approval, a month after overseas media reported the Shenzhen-listed company was considering a secondary float.

The firm's shares rose 5.57% the day after the boardroom vote, pushing the group's market value back above 100 billion yuan ($14 billion).

In explaining its equity ambitions, the hospital chain said it was looking to broaden its access to international capital and support ongoing global expansion plans. But the company enjoys relatively strong cash flow and had previously played down the prospects for a Hong Kong listing.

At a shareholder meeting last May, Chairman Chen Bang said Aier Eye had no plans to launch H-shares, citing solid financing capacity and a lack of suitable overseas acquisition targets in the near term. The decision to press ahead with a Hong Kong listing appears to be less about meeting funding needs and more about changing market perceptions.

Aier Eye has grown into China's leading private provider of ophthalmology services over the past decade, building a tiered network with the help of M&A. By the end of 2025, it operated 391 hospitals and 272 outpatient clinics in China, along with 179 overseas ophthalmology centers and clinics. Annual outpatient visits rose 11.52% to 18.89 million from the prior year, while the number of surgical cases handled by the group rose 5.77% to 1.68 million.

The group developed rapidly into an industry giant, with annual net profit rocketing from about 92 million yuan in 2009 to 743 million yuan in 2017, implying a compound annual growth rate of around 30%. Its share price soared to a peak of 42.49 yuan in July 2021, when the group's market value approached 400 billion yuan and its price-to-earnings ratio exceeded 100 times.

In recent years, however, the pace has flagged. Revenues rose just 6.53% to 22.35 billion yuan in 2025, while net profit fell 8.88% to 3.24 billion yuan, weighed down by one-off items such as goodwill impairment. Excluding these factors, adjusted net profit edged up 1.36% to 3.14 billion yuan, pointing to stable underlying earnings. The new fiscal year has brought signs of recovery, as revenues rose 6.15% to nearly 6.40 billion yuan in the first quarter of 2026 from the year-earlier period, while net profit increased 12.46% to 1.18 billion yuan.

Overseas opportunity

While its core business is still growing, profits have been squeezed by intensifying competition, pricing pressure and rising costs. Domestic gross margin fell 1.22 percentage points to 47.26% in 2025, but the firm's overseas gross margin enjoyed upward momentum, rising 0.58 percentage points to 46.17%.

The company's overseas network of ophthalmology centers and clinics spans Hong Kong, Europe, the United States and Southeast Asia. Overseas revenue reached 3.06 billion yuan in 2025, up 16.47% year on year, with its share of total turnover rising to 13.68% from 12.51% in 2024. But healthcare services are not standardized consumer products. Aside from capital, success in scaling up the overseas business is subject to various factors, including the available medical workforce, local regulatory frameworks and health insurance coverage.

Aier Eye's Shenzhen-traded stock has fallen around 70% from its peak, hit by a broader contraction in mainland shares, the firm's slowing growth and negative headlines around medical services. A Hong Kong launch at this point could prove a double-edged sword. On the plus side, a Hong Kong presence could enhance the group's ability to fund its overseas expansion and help facilitate cross-border M&A. The visibility could boost the brand and help forge partnerships with physicians. But on the debit side, healthcare service providers in Hong Kong typically trade at lower valuations than their peers on mainland markets. If the Hong Kong issuance is priced at a meaningful discount, investors may reassess the premium attached to the mainland shares.

C-MER Medical (3309.HK) serves as a comparison. The Hong Kong-listed ophthalmology chain trades at around 15 times earnings, compared with about 30 times for Aier Eye, whose revenue and profit are more than 10 times that of C-MER Medical. Even so, Aier Eye would need to prove that its overseas expansion will accelerate revenue growth and contribute consistently to the bottom line to justify a significantly bigger premium.

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Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.