With the intensification of aging, changes in people's lifestyles, and the increasing proportion of myopia among young people, ophthalmology has gradually become the "darling" sought after by capital.
Riding on the east wind of "appearance economy", when the eyes, the window of the soul, have to be covered with a layer of glass lenses prematurely, many people will choose vision correction to try to get rid of this layer of lenses.
According to Frost & Sullivan, "China's Medical Device Industry Development Report", the overall size of my country's ophthalmology market in 2019 reached 170 billion yuan, and it is expected to reach 193.8 billion yuan in 2020. By the end of the 14th Five-Year Plan, it will exceed 310 billion yuan.
The popularity of the ophthalmic medical field has suddenly risen and it is bustling. Under the leadership of the head enterprise "Aier Ophthalmology", the market has set off an upsurge of listing ophthalmic hospitals.
On November 9, after two consecutive submissions failed, Clear Medical once again launched an impact on the Hong Kong Stock Exchange, planning to list on the main board, with Everbright Securities acting as the sole sponsor.
At present, there are many outstanding players in the capital market. As a "new force", Clear Medical is now listed on the Hong Kong stock market. How many industry dividends can it grasp? The IPO catcher will explain the road to medical listing for everyone from the following dimensions.
100 Billion Market Comes with the Wind
In today's consumption power is greatly improved, people are almost inseparable from electronic products, which leads to the emergence of various ophthalmic diseases, such as myopia, glaucoma and so on. However, it costs at least hundreds to thousands of dollars to go to see the eyes casually and get a pair of eyes.
There are about 550 million myopia patients, 10 million glaucoma patients, 6 million cataract patients and 11.6 million fundus neovascular disease patients in my country. Regardless of the overlapping incidence, the number of patients with the above four major eye diseases exceeds 580 million, and more than 40% of the population in my country is troubled.
From the perspective of industrial structure, in the scale of the ophthalmology market in 2019, the ophthalmic medical market is 124 billion yuan, accounting for 73%, the ophthalmic device market is 26.7 billion yuan, accounting for 16%, and the ophthalmic drug market is 19.3 billion yuan, accounting for 11%.
The performance of Aier Ophthalmology has grown rapidly with the help of the huge demand in the ophthalmic diagnosis and treatment market. According to its financial report data, from 2009 to 2019, its operating income increased from 606 million yuan to 9.99 billion yuan, an increase of 15.49 times in 11 years; it belongs to the parent company Shareholders' net profit increased from 92 million yuan to 1.38 billion yuan, a 14-fold increase in 11 years, which shows the huge profits of the ophthalmic medical industry.
So, how did such a lucrative ophthalmic medical industry catch fire?
With the increase in the number of ophthalmic diseases, there are more and more ophthalmic patients. In 2018, 3.5 million Hong Kong citizens suffered from myopia (accounting for 47% of the total number of Hong Kong citizens). Due to social pressure and the increasing popularity of digital products, it is estimated that myopia will affect 3.8 million Hong Kong citizens by 2023. In addition, the population of presbyopia in Hong Kong also reached 3.2 million in 2018, and it is expected that this figure will reach 3.5 million in 2023.
The high prevalence of ophthalmology shows the huge market potential of the ophthalmology medical industry. According to Frost & Sullivan’s analysis, in 2020, the total market size of ophthalmic medical services in Hong Kong will be approximately HK$8,463.4 million, and the market size is expected to grow at a compound annual growth rate of 5.7% from 2021 to 2025, reaching 11149.8 million Hong Kong dollars.
For a company that is going for an IPO, although the huge market size is a big plus, the fundamentals of the company are also very important.
Double growth in revenue and net profit
Clarity Medical and its predecessor were established in August 2005, initially providing services for cataract treatment, and gradually developing other ophthalmic medical services. At present, Clear Medical is mainly engaged in medical services such as full femtosecond laser small incision lens resection, replacement of multi-focal intraocular lenses, and implantable contact lenses.
According to Frost & Sullivan, Clear Medical ranked fourth among all private medical institutions in Hong Kong in 2020 with a market share of 5.0% in terms of revenue from ophthalmic medical services.
According to the prospectus data, for the three years ending March 31, 2021 and the four months ending July 31, 2021, the company’s revenues were HK$207 million, HK$218 million, HK$222 million and HK$78.398 million, respectively. The net profits were HK$30.039 million, HK$26.387 million, HK$35.769 million and HK$5.149 million respectively.
According to the data in the prospectus, in 2018, 2019 and 2020, the total amount of medical consumables purchased by Clear Medical was 17.5 million Hong Kong dollars, 21.4 million Hong Kong dollars, and 16.9 million Hong Kong dollars respectively. For a medical company, medical devices are an important part of raising the barriers to competition. Therefore, as the coverage of indications is further expanded in the future, new drugs and diversified products and therapies are authorized to be introduced, the procurement expenses of Clear Medical will also increase with business growth.
The contest of speed and breakthrough
From 2015 to 2019, the market size of ophthalmic drugs in China increased from US$1.8 billion to US$2.6 billion at a compound annual growth rate of 9.3%, and is expected to increase to US$7.2 billion in 2025 at a compound annual growth rate of 18.6%, while The compound annual growth rate from 2025 to 2030 will further increase to 22.9%.
Looking at the development of the domestic ophthalmic medical market in recent years, Opcon Vision and Aier Ophthalmology can be regarded as ace enterprises in the industry.
Opconvision is an ophthalmic pharmaceutical platform company that currently has a pipeline of 16 drugs and candidate drugs, covering all major anterior and posterior eye diseases. Aier Ophthalmology is not inferior either. As a professional ophthalmology chain medical institution, Aier Ophthalmology is mainly engaged in diagnosis and treatment of various ophthalmic diseases, surgical services and medical optometry.
In addition to the two leading players, Aier Ophthalmology and Opcon, public eye hospitals also hold a low position in the industry by virtue of their scale advantages and medical reform policies.
Although there are many players in the industry, there are also many pain points in the industry. Not any company can do this business well.
First of all, the entry threshold for the ophthalmic medical industry is very high. It is more difficult to obtain a medical institution license than ordinary business, and you must have complete medical technology, venues, equipment, and professional doctors.
Then there is a lack of domestic professionals. Compared with the number of patents of Clear Medical and Aier Ophthalmology, the domestic leader, they are not of the same order of magnitude. In addition, many domestic institutions lack doctors who meet the standards, and some institutions even need to find doctors across the country for online diagnosis because of the lack of professional doctors.
Secondly, in the future, public hospitals will move closer to the medical service industry, and ophthalmology may become a key development target of public hospitals due to its high profitability and medical service-oriented characteristics. As a relatively more authoritative choice, both clear medical and other players will face greater challenges.
The ophthalmology market is in a stage of high-growth development. With the increase of market demand, we have not yet seen the ceiling of the industry in the short term. At present, Qingming Medical is relatively backward in terms of innovation ability, profitability and commercialization level. If it wants to replicate the success of Aier Ophthalmology and Opconvision, will the financing in Hong Kong provide more strength and support for Qingming Medical? It is very important to support and accelerate its commercialization process.
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