FAST NEWS: Clarity Medical Reports Profit Decline, Eyes Chinese Mainland Acquisitions

The latest: Private ophthalmology hospital operator Clarity Medical Group Holding Ltd. (1406.HK) on Monday reported its net profit fell by 24.5% to HK$7.91 million ($1.01 million) in the six months through September, in its first interim results since listing early this year in Hong Kong.

Looking up: The company revealed that in addition to continuing to strengthen its market position in Hong Kong by establishing and acquiring new facilities, it also plans to acquire equity interests in eye-related clinics or hospitals on the Chinese mainland to expand its presence under the “Clarity” brand.

Take Note: The company’s total revenue for the six-month period decreased by 8.4% to HK$108 million, mainly due to a decrease in revenue from refractive therapy and other eye treatments as people continued to defer elective surgeries during the Covid-19 pandemic.

Digging Deeper: Founded in 2005, Clarity Medical is a private ophthalmology specialist providing comprehensive eye care services. The company is based in Hong Kong and plans to enter the mainland China market. It raised HK$180 million through its February listing in Hong Kong this year, and has said it will use some of those funds to acquire one or two eye clinics in the Greater Bay Area in Southern Guangdong province. Clarity Medical’s top investors that can help in that expansion include 3W Partners, a private equity firm with rich experience investing in the industry, and Wuxi AppTec (2359.HK), a leading contract research organization (CRO) in the medical field.

Market Reaction: Clarity Medical initially dipped 4.8% when trading began on Tuesday, but later rebounded and was down by a more modest 1% at HK$1.02 by the midday break. The company’s shares have moved steadily downward since their debut, and are now 36.3% lower than the IPO price of HK$1.60.

Translation by Jony Ho

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