Aier Eye Hospital Acquires Latin America's Leading Ophthalmology Chain, Furthering Global Layout

Overview

Nomura Securities issued a quick review report analyzing Aier Eye Hospital (300015.SZ)'s acquisition of Brazil's largest ophthalmology chain group for RMB 696 million. The report considers this acquisition a key milestone in the company's global strategy, while subsequent profitability improvements will test operational integration capabilities. Buy rating maintained with a DCF valuation target price of 13.32 yuan.

Core views

Acquisition Details: Aier Eye Hospital acquired two Brazilian ophthalmology service providers, Clinicas do Brasil and Contact-Gel, using cash totaling 530 million Brazilian Reais (approximately RMB 696 million), holding 50.07% and 60.57% stakes respectively. The transaction valuation is approximately 9x EV/EBITDA (adjusted for net debt), corresponding to a price-to-sales ratio of 1.04x. Target Company Scale: As of March 2026, the target group operates 81 eye centers across 8 states in Brazil, possessing 72 operating theaters, over 500 clinics, 880 doctors, and 2,700 employees. In 2025, outpatient visits totaled 1.2 million, examinations reached 3.3 million, and surgeries numbered 180,000, covering comprehensive ophthalmology services including cataract, retinal, and glaucoma treatments. Financial Comparison: The target group recorded 2025 revenue of 843 million Brazilian Reais (approximately 6% of Aier Eye Hospital's FY25 revenue) with an operating margin of 14.2% (lower than Aier Eye Hospital's 21.6%). High debt levels led to a net loss in FY25. Aier Eye Hospital intends to use investment funds to repay the target company's debts; its end-of-FY25 net assets stood at 434 million Brazilian Reais (total assets 1,294 million Brazilian Reais). Strategic Significance: This acquisition marks Aier Eye Hospital's expansion from China, Southeast Asia, and Europe/Americas into the Latin American market. Economies of scale are expected to reduce procurement costs for lenses, medical devices, etc. However, profitability improvements in the target company will test cross-border integration capabilities, requiring continuous tracking.

Analysis framework

Nomura employed a DCF (Discounted Cash Flow) model for valuation, assuming a WACC of 9.4% and a terminal growth rate of 4.0%, with the benchmark index being the CSI 300. The analysis logic focuses on three points: first, verifying the execution capability of the global strategy through acquisition scale; second, comparing operating margin differences between the two parties, noting that high debt is the primary cause of the target company's losses; third, emphasizing the potential for supply chain cost optimization driven by economies of scale, while highlighting integration risks that need observation.

Methodology notes

• Valuation MethodDCF Cash Flow Discounting

  Calculating intrinsic value based on discounted future free cash flows

  The research report uses a DCF model setting WACC at 9.4% and a terminal growth rate of 4.0% to derive the target price of 13.32 yuan. This method suits companies with stable cash flows, helping investors understand valuation anchors.

• Competition and Strategy FrameworkEconomies of scale / learning curve

  Reducing unit costs by expanding scale

  The report indicates that post-acquisition centralized procurement of lenses, medical devices, etc., can reduce material costs, reflecting economies of scale effects, which is a common cost optimization path in the healthcare services industry.

• Event Gaming and Behavioral Finance

  Cross-border M&A Integration Risks

  The report emphasizes that profitability improvements in the target company will test operational integration capabilities. Such risks are common in cross-border M&A, requiring attention to practical implementation effects such as cultural differences and management synergies.

Key data

• Acquisition AmountBRL 530mn (CNY 696mn)Cash transaction, controlling two Brazilian ophthalmology institutions
• Target Company RevenueBRL 843mn (FY25)Approximately 6% of Aier Eye Hospital's FY25 revenue
• Operating Margin14.2%Lower than Aier Eye Hospital's FY25 margin of 21.6%
• Implied Upside of Target Price61.5%Calculated based on current price of 8.25 yuan and target price of 13.32 yuan
• Valuation Multiple20.4x FY26F EPSCurrent share price corresponds to expected earnings per share of 0.40 yuan for 2026

Impact & implications

For Aier Eye Hospital: This acquisition is a critical step in its global strategy; after completing layout in the Latin American market, it is expected to reduce procurement costs through economies of scale, but the progress of debt repayment and profitability improvement in the target company will affect short-term financial performance. For the Industry: With increasing cases of Chinese medical service institutions going global, cross-border integration capabilities may become a competitive watershed.

Risks

• Further narrowing of valuation premium
• Deterioration of macroeconomic conditions
• Risk of medical malpractice
• Risk of goodwill impairment

What to watch

• Progress of profitability improvement in the target company post-acquisition
• Effectiveness of cross-border operational integration
• Progress of the H-share issuance plan