Good News on Listing | Frost & Sullivan Assists Chaoyu Eye Medical Holdings Limited to Successfully List in Hong Kong (2219.HK)

Chaokoo Eye Care Medical Holdings Limited (hereinafter referred to as 'Chaokoo Eye Care') successfully went public on July 7, 2021, with a global issuance of 17,093 million shares at an issue price of HK$10.6, raising approximately HK$1.812 billion. Frost & Sullivan (Frost & Sullivan, hereinafter referred to as 'Frost & Sullivan') provided exclusive industry advisory services for Chaokoo Eye Care's listing and hereby extends its warmest congratulations on its successful listing.

During the Hong Kong listing process, Frost & Sullivan mainly undertook the following tasks: helping the company accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the company's competitive advantages, assisting the company, investment banks, and other intermediaries in completing relevant parts of the prospectus (such as the overview, competitive advantages and strategy, industry overview, business, and other important sections), facilitating communication with the Hong Kong Stock Exchange and investors, helping investors quickly understand the market ecosystem and competitive landscape, and assisting the company in completing feedback on various industry-related issues from the Hong Kong Stock Exchange.

In recent years, due to various factors such as the increase in the elderly population and the acquisition and use of digital products (especially among teenagers), the number of ophthalmic disease cases in China has gradually increased. Myopia, presbyopia, and cataracts are the three most common eye diseases in China, with the number of patients rising every year and each disease having exceeded 10 million patients since 2014.

The number of myopic patients in China increased from 5.429 million in 2015 to 5.939 million in 2019, and it is expected to rise to 6.698 million by 2024. The number of presbyopic patients over the age of 45 in China increased from 3.544 million in 2015 to 4.046 million in 2019, and it is expected to rise to 4.764 million by 2024. The number of cataract patients over the age of 45 in China increased from 1.275 million in 2015 to 1.550 million in 2019, and it is expected to increase to 1.965 million by 2024.

Ophthalmology is a comprehensive medical surgical specialty involving the eyes and their diseases. Ophthalmic medical services can be divided into two parts: consumer-oriented ophthalmic services and basic ophthalmic services. Consumer-oriented ophthalmic services refer to those with a consumer nature, mainly including two aspects: refractive correction and myopia prevention and control. Basic ophthalmic services mainly refer to the diagnosis and treatment of basic eye diseases, including cataracts, ocular surface diseases, fundus diseases, and others.

Due to continuous economic growth and increasingly severe population aging, the ophthalmic medical service market in China has been steadily expanding in recent years and is expected to continue growing at a higher rate in the future. The scale of the ophthalmic medical service market in China increased from RMB 73 billion in 2015 to RMB 127.5 billion in 2019, with a compound annual growth rate of 15.0%, and is expected to reach RMB 223.1 billion by 2024. The share of private medical institutions in the ophthalmic medical service market in China increased from RMB 14.6 billion in 2015 to RMB 31.4 billion in 2019, with a compound annual growth rate of 21.1%, and is expected to reach RMB 70.7 billion by 2024. During the same period, the share of public medical institutions in the ophthalmic medical service market in China increased from RMB 58.4 billion to RMB 96.1 billion, with a compound annual growth rate of 13.3%, and is expected to reach RMB 152.4 billion by 2024.

The market scale of consumer ophthalmic medical services in China increased from RMB 239 billion in 2015 to RMB 510 billion in 2019, with a compound annual growth rate of 20.8%. It is expected to reach RMB 1093 billion by 2024. During the same period, the market scale of basic ophthalmic medical services increased from RMB 491 billion to RMB 765 billion, with a compound annual growth rate of 11.8%. It is also expected to reach RMB 1138 billion by 2024.

The population is constantly increasing, and there is an urgent need for ophthalmic medical services

The number of cases of related eye diseases in China has been gradually increasing due to multiple factors, including an aging population and an increase in the acquisition and use of digital products (especially among teenagers). As a result, the number of people suffering from eye diseases is rising continuously, creating greater demand for ophthalmic medical services and more opportunities for ophthalmic medical service providers.

More advanced equipment and expanded range of surgical types

The technology used for refractive surgery and intraocular lens replacement in China has undergone earth-shattering changes over the past two decades. Cutting-edge high-tech equipment not only improves treatment outcomes but also increases success rates. For example, with the development of intraocular lenses from single-focus to trifocal lenses, these high-quality intraocular lenses can provide full-range good vision for people with presbyopia and cataracts. Ophthalmic hospitals are equipped with advanced medical devices required for different surgeries, promoting the market development of China's ophthalmic medical service market.

Personal income and living standards have improved

Over the past few decades, the Chinese economy has been continuously developing at a rate higher than the global average. The living standards of Chinese residents have been improving, with per capita disposable income increasing from RMB 21,966 in 2015 to RMB 30,733 in 2019. Economic growth has boosted household wealth, thereby fueling consumption in healthcare. As living standards improve, residents' awareness of healthcare will also increase to pursue a better quality of life, thus driving the growth of China's ophthalmic medical service market.

The development of private ophthalmic chain hospitals

In the past, people believed that only public hospitals could provide reliable medical services. Moreover, most medical insurance did not cover the costs incurred for treatment provided by private hospitals. Nowadays, some ophthalmic chain hospitals offer more specialized ophthalmic treatments and patient-centered services, which are becoming increasingly popular. Furthermore, the government has expanded the scope of basic medical insurance coverage to private sectors. Additionally, with the development of the commercial insurance market, many insurance plans now cover high-end medical care, thus encouraging consumers to seek treatment at private ophthalmic hospitals and expanding their market share in the ophthalmic service market.

More advanced and expensive equipment

Equipment used for ophthalmic disease examination and surgical treatment (such as the Ultra Q Reflex laser treatment instrument for posterior membrane resection, capsulorhexis, and iridotomy procedures, as well as the Visumax for full femtosecond surgeries), involves advanced technology and is usually very expensive. With increased investment, more private ophthalmic medical service providers will purchase costly tools in the short term to provide complex surgeries.

Implement basic ophthalmic medical services in the primary healthcare market

In recent years, the Chinese government has introduced a series of policies such as the 13th Five-Year National Eye Health Plan, constructing a multi-level ophthalmic medical service network. Due to the large population in the underserved markets (i.e., third-tier cities and rural areas), where ophthalmic medical services are severely lacking, the basic ophthalmic medical service market in these areas is expected to grow rapidly. In addition, with the development of technology and increasing investment in primary medical services, ophthalmic medical institutions in the underserved markets will be able to narrow the gap with developed regions, especially in the treatment of common ophthalmic diseases. Therefore, it is expected that the growth rate of basic ophthalmic medical services in the underserved markets will be the fastest.

The Internet promotes the development of consumer-oriented ophthalmic medical services

With the rapid development of the internet, the consumer market for ophthalmic medical services is also expanding significantly. Online medical service platforms facilitate knowledge exchange on myopia prevention and control as well as refractive correction, thereby reducing consumers' fear of innovative therapies and increasing their acceptance of ophthalmic services. In addition, healthcare institutions can enhance information transparency and build brand awareness through marketing on online medical service platforms. Clearly, the development of the internet will fully tap into the potential demand for ophthalmic services and contribute to future market development.

Frost & Sullivan, integrating 60 years of global consulting experience, has dedicated 23 years to serving the booming Chinese market with a global perspective. It helps clients accelerate their business growth by achieving industry-leading benchmarks in growth, innovation, and technology. The healthcare industry is one of the core areas of focus for Frost & Sullivan. Over the past sixteen years, the Frost & Sullivan healthcare team has provided services such as financing financial advisory, IPO industry advisory, strategic consulting, and management consulting to hundreds of outstanding domestic and international biopharmaceuticals, medical devices, healthcare services, and internet healthcare companies. Successful listing cases include: Guichuangtongqiao (2190.HK), Hehuang Medicine (0013.HK), Keji Pharmaceutical (2171.HK), Zhaoke Ophthalmology (6622.HK), Nature Medicine (UPC.NASDAQ), Sain Life Sciences (6600.HK), Zhaoyan New Drugs (6127.HK), Novogene Health (6606.HK), Tianyan Pharmaceuticals (ADAG.NASDAQ), Beikang Medical (2170.HK), Jianbimiao Miao (2161.HK), Minimally Invasive Cardiac Thrombosis (2160.HK), Rui Li Medical Beauty (2135.HK), Jiake Pharmaceutical (1167.HK), HepoGenesis Medical (2142.HK), JD Health (6618.HK), Deqi Medicine (6996.HK), Rongchang Biotech (9995.HK), WuXi AppTec (2126.HK), SinoBIO (2096.HK), Yunding Newray (1952.HK), Jiahe Biotech (6998.HK), Zai Ding Medicine (9688.HK), OcumView (1477.HK), Yongtai Biotech (6978.HK), Hapu Pharmaceutical (9989.HK), Kaisun Pharmaceutical (9939.HK), Peijia Medical (9996.HK), Kangfang Biotech (9926.HK), Novogene Health (9969.HK), Tianjing Biotech (IMAB.NASDAQ), Kanglong Chemical (3759.HK), China Antibody (3681.HK), Dongyao Pharmaceutical (1875.HK), Yasheng Medicine (6855.HK), Desigene (1846.HK), Hansoh Pharmaceutical (3692.HK), Mabtech (2181.HK), Fangda Holdings (1521.HK), Via Biotech (1873.HK), CStone Pharmaceuticals (2616.HK), Junshi Biosciences (1877.HK), WuXi AppTec (2359.HK), Innovent Biologics (1801.HK), Hailun Medicine (2552.HK), BeiGene (6160.HK), Gilead Sciences (1672.HK), Simcere Ophthalmology (3309.HK), China Resources Medicine (3320.HK), Yager Scientific Research Pharmaceutical (2633.HK), Hehuang China Medicine (HCM.NASDAQ), Biotechnology (1548.HK), BBI Life Sciences (1035.HK), etc. In terms of the number of submissions, the Frost & Sullivan healthcare team maintains an absolute leading position in Hong Kong's healthcare IPO market, continuously occupying more than 90% of the market share from 2018 to 2020.

Since the listing of the first batch of companies on the Sci-tech Innovation Board in July 2019, Frost & Sullivan reports have been widely cited in the prospectuses of leading Sci-tech Innovation Board-listed companies in the industry, including: Huaxi Biotech (688363.SH), Junshi Biosciences (688180.SH), Zhejiang Genomics & Biotechnology Co., Ltd. (688266.SH), Bio-Thera (688177.SH), and Shenzhou Cells (688520.SH). It is considered one of the most powerful, professional, and influential industry research institutions in the sector. We hope to work with enterprises to understand industry trends, seize development opportunities, jointly promote innovation and upgrading of China's healthcare industry, and build a healthy future.