FAST NEWS: Chaoju Eye Care’s Growth Slows on Covid Disruptions

The latest: Eye clinic operator Chaoju Eye Care Holdings Ltd. (2219.HK) on Monday reported its revenue grew 6.5% to 532.7 million yuan ($77.1 million) in the first half of the year, while its net profit rose 29.4% to 101.8 million yuan.

Looking Up: The company posted nearly 10% revenue growth for its higher-end consumer ophthalmic services, outpacing its overall growth. As a result, consumer ophthalmic services accounted for 54.6% of its total revenue in the latest reporting period, up from 53.3% a year earlier.  

Take Note: Despite the strong net profit growth, the company’s non-IFRS adjusted net profit, which excludes costs related to employee stock grants, rose just 4.8% to 103 million yuan.

Digging Deeper: Chaoju 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. Its latest revenue growth was down sharply from the year-ago period, with the company blaming China’s strict Covid control measures that prevented people from visiting its clinics. Based in the city of Baotou in China’s less-affluent Inner Mongolia region, Chaoju operated 18 ophthalmic hospitals and 25 optical centers at the end of June, up from 17 ophthalmic hospitals and 23 optical centers a year earlier. The company went public in July last year.

Market Reaction: Chaoju’s shares rose as much as 9.2% when trading began on Tuesday. They later gave back some of those gains, but were still up 5.9% at HK$4.15 at the midday break in Hong Kong. The stock now trades near its post-IPO lows.

Reporting by Doug Young

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