Producer: Sina Finance Listed Company Research Institute
Author: Fuyun
Core view: Huaxia Ophthalmology accounts for more than 70% of the revenue in East China, which is the company's base camp. However, in recent years, Aier Ophthalmology has grown rapidly in this region, and in 2023, its revenue in the region will surpass that of Huaxia Ophthalmology in one fell swoop. In addition, the company has been deeply questioned about the loss of state-owned assets in the restructuring of Xiamen Eye Center. Today, the chairman of the company has not been released from his detention since last year, and the reason for his retention is still a mystery.
With the closing of the first quarter of 24, the A-share ophthalmology track industry as a whole is under pressure.
In the first quarter of 2024, the median revenue growth rate of the ophthalmology industry was only 3.67%, and the median net profit growth rate fell sharply by 22.63%.
It should be pointed out that the ophthalmology industry as a whole will show a rapid growth trend in 2023, with a median revenue growth rate of more than 30% and a median net profit of more than 60%, and the performance of the first quarter report is obviously much inferior. A detailed study of the reasons shows that due to the impact of the epidemic in 22 years and the release of related demand in 23 years, there is a low base and high growth phenomenon in 23 years.
However, judging from the performance of the above four ophthalmology companies in the first quarter, they can be roughly divided into the following three categories: first, Aier Ophthalmology and Huaxia Ophthalmology, which have increased revenue and profits; second, Purui Ophthalmology, which does not increase profits; Third, He's Ophthalmology, whose revenue and net profit both fell. What kind of signals are reflected behind the "very different" data? Based on the above background, we have an in-depth review of the above four ophthalmology, and this article will focus on Huaxia Ophthalmology.
Emulate the Aier expansion model? The base camp was penetrated by Aier Ophthalmology
Huaxia Ophthalmology released its 2023 annual report, and the company achieved revenue of 4.013 billion yuan in 2023, a year-on-year increase of 24.12%; net profit attributable to the parent company was 666 million yuan, a year-on-year increase of 29.6%; Basic earnings per share was 0.79 yuan. The company plans to distribute a cash dividend of 1.1 yuan (tax included) to all shareholders for every 10 shares, with a total cash dividend of 91.8252 million yuan.
It is worth mentioning that the company's performance scale is the second in the industry among the four ophthalmology. In the first quarter of this year, the company's performance continued to grow, and the first quarterly report showed that the company achieved operating income of 978 million yuan, a year-on-year increase of 5.09%, and the net profit attributable to the parent company was 156 million yuan, a year-on-year increase of 3.75%.
Founded in 2004, the company provided ophthalmic diagnosis and treatment services with Xiamen Eye Center as the core in the early days. After that, the company gradually established a model with Xiamen Eye Center as the center and radiating to the whole country. At present, the Group has established 57 ophthalmology hospitals and 60 optometry centers in 47 cities in 18 provinces and municipalities across the country, covering East China, Central China, South China, Southwest China, North China and other regions. The East Region is still the company's basic market. According to the 2023 annual report, the company's revenue in East China accounted for 74.14%.
Source: Announcement
It is worth noting that from the perspective of regional revenue scale, Aier Ophthalmology has broken through Huaxia Ophthalmology. In 2023, the revenue of Huaxia Ophthalmology in East China will be 2.975 billion yuan, and that of Aier Ophthalmology will be 3.114 billion yuan in the same period. It should be pointed out that in 2022, the revenue of Huaxia Ophthalmology in East China will be 2.366 billion yuan, and that of Aier Ophthalmology will be 2.308 billion yuan in the same period, and the revenue of the two will be comparable. It can be seen that the revenue growth rate of Aier Ophthalmology in East China is relatively rapid compared with Huaxia Ophthalmology.
In this context, the company seems to have also opened the growth model of Aier Ophthalmology, that is, the company has set a two-wheel drive strategy of "endogenous growth + epitaxial mergers and acquisitions".
On the one hand, the company sets up an M&A fund. In August 2023, the Company and CLP Digital (Beijing) Private Equity Fund Management Co., Ltd. and other partners jointly participated in the investment in Xiamen Huaxia Juxin No. 1 Investment Partnership (Limited Partnership) (hereinafter referred to as "Huaxia No. 1") and signed the "Xiamen Huaxia Juxin No. 1 Investment Partnership Enterprise (Limited Partnership) Partnership Agreement", in which the Company subscribed and contributed 85.995 million yuan with its own funds as a limited partner. According to the partnership agreement, Huaxia No.1 will mainly invest in and manage ophthalmology hospitals and ophthalmology-related industries, provide high-quality project reserves for the company's rapid development, and accelerate the improvement of the company's national ophthalmic medical service network.
On the other hand, since 2023, the company has successively included the "territory" of Huaxia Ophthalmology through epitaxial mergers and acquisitions, Hefei Shining Eye Hospital, a third-class eye hospital, and Chengdu Aidi Eye Hospital, a famous optometry hospital. According to public information, Huaxia Ophthalmology intends to acquire 100% of the equity of Juxin No. 1 Consulting Company for a transaction consideration of 502.5 million yuan, and the main assets of the target company are Chengdu Aidi Eye Hospital (Class 3A), Weishan Medical University Eye Hospital and Suining Fuxing Eye Hospital, which are indirectly controlled by it.
The stock price broke and the chairman's lien further dragged down the stock price
As of 2024-05-11, according to the latest rules for regulating share reduction issued by the Shanghai and Shenzhen Stock Exchanges, Huaxia Ophthalmology has been broken, and the controlling shareholders and actual controllers are not allowed to reduce their holdings of the company's shares through the secondary market.
It is worth noting that three ophthalmologies, including Huaxia Ophthalmology, Purui Ophthalmology, and He's Ophthalmology, will be listed in 2022, but it is He's Ophthalmology and Huaxia Ophthalmology that are broken. As for why He's ophthalmology is broken, we have written in "The Two "Hard Injuries" Behind the Bottom of He's Ophthalmology's Performance? The over-raised funds flow to the trading company "Perspective Ophthalmology" pointed out in the article that due to the dependence of He's ophthalmology on the regional market and the low proportion of consumer attribute business, the breakage may be logical and self-consistent.
As for why Huaxia Ophthalmology is broken, it may be a little puzzled, first, from the perspective of the competitive landscape, Huaxia Ophthalmology belongs to the second echelon of the industry; From the perspective of business attributes, the company's consumption attributes account for a relatively high proportion.
Aier Ophthalmology, Huaxia Ophthalmology, Preh Ophthalmology, He Ophthalmology and other refractive and optometry businesses accounted for 61%, 55%, 62% and 33% respectively. In the ophthalmology track, the treatment of a variety of common ophthalmic diseases such as cataract, glaucoma, strabismus, fundus, ocular surface, eye frame and pediatric eye disease is a basic ophthalmology service, which is suppressed by medical insurance control costs; However, refractive correction, myopia prevention and control, and the provision of optometry products and services are not affected by medical insurance costs, showing high consumption attributes. Obviously, the consumption attribute of Huaxia Ophthalmology is not low.
It is worth noting that the company's stock price was further dragged down by the influence of the chairman's lien.
On December 6, 2023, Huaxia Ophthalmology announced that Su Qingcan, the company's actual controller and chairman, was placed in custody by the Shanghai Municipal Supervision Commission for personal reasons. The day after the actual controller of Huaxia Ophthalmology was detained, the company's stock price fell by more than 11%, and since then the stock price has been declining, and even hit a record low of 23.5 yuan per share on April 24.
It has been a mystery why the company's chairman was placed in detention. Regarding the relevant situation of the chairman of the board of directors, Huaxia Ophthalmology said on the investor interactive platform on March 25 this year that as of now, the company has not received further information, nor has it received a notice from the relevant departments to investigate the company. If there is any follow-up progress, the company will fulfill the information disclosure obligation in a timely manner in strict accordance with the provisions of relevant laws and regulations.
It is worth mentioning that the company's historical restructuring has been questioned by the loss of state-owned assets. It is reported that in 2001, the state-owned Xiamen Eye Center began to restructure, and Su Qingcan intervened. As one of the most profitable public hospitals in Xiamen at that time, Su Qingcan's purchase of Xiamen Eye Center was considered by the industry to be significantly lower than the market price. In the process of IPO issuance, Huaxia Ophthalmology was required by the regulator to disclose the legality and compliance of the restructuring from a public institution owned by the whole people to a for-profit medical institution in 2004, whether the necessary procedures were performed, and whether the relevant consideration was paid for the restructuring; and the reasons and necessity of being restructured into a non-profit medical institution in 2006, and whether there is a situation in which the non-profit medical institution has obtained special tax incentives, government funding or specific qualification certificates; and whether the above matters have led to the loss of state assets.
According to public information, among Huaxia Ophthalmology, Puri Ophthalmology, and He's Ophthalmology, Huaxia Ophthalmology was the first to complete the initial offering, but it was the last to be listed, and it took nearly 17 months to wait in the middle. There are still many questions about why the company's listing and issuance took so long, and finally succeeded in obtaining the listing and issuance, whether there is any other story behind this.