Chaoju Eye Care announced Monday that its board of directors has approved the company to repurchase up to HK$100 million worth of shares in the open market.

The latest: Chaoju Eye Care Holdings Ltd. (2219.HK) announced Monday that its board of directors has approved the company to repurchase up to HK$100 million ($12.8 million) worth of shares in the open market for a period of 12 months starting from Dec. 19th.

Looking up: Such repurchases are usually intended to signal to investors that management is optimistic about the company’s future growth prospects or believes its shares are significantly undervalued.

Take Note: The Company states that the execution of the repurchase program will depend on market conditions and does not guarantee the timing, quantity or price of any repurchases.

Digging Deeper: Based in China’s Inner Mongolia region, Chaoju operates a chain of 26 ophthalmic hospitals and 27 optical centers in five Chinese provinces and autonomous regions. The company is part of a growing field of private clinic operators catering to increasingly affluent Chinese with extra income to spend on services like eye care. After experiencing a drop in revenue last year due to the Covid pandemic, the company’s revenue in the first half of the year rebounded 30% year-on-year to 693 million yuan ($97 million), while net profit jumped 44.3% to 147 million yuan, thanks to the lifting of official pandemic control measures.

Market Reaction: Chaoju’s shares rose on Tuesday, closing up 4.8% HK$4.40. The stock now trades near the lower end of its 52-week range.

Translation by A. Au

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