C-MER Medical (3309) H2 2023 earnings summary

Executive summary

• Total revenue rose 11.1% year-over-year to HK$1,924.0 million, driven by a 32.9% increase in core medical service revenue, offset by a 93.5% drop in COVID-19 consumables sales.

• Net profit reached HK$86.3 million, reversing a loss of HK$46.2 million in 2022, mainly due to strong recovery in dental and ophthalmic services.

• Gross profit increased 38.3% to HK$619.0 million, with gross margin improving to 32.2% from 25.9% year-over-year.

• No final dividend was recommended for 2023.

Financial highlights

• Core medical service revenue hit a record HK$1,904.5 million, up 32.9% from 2022.

• Sales of COVID-19 consumables fell sharply to HK$19.4 million from HK$298.3 million.

• EBITDA rose 52.4% to HK$343.5 million.

• Basic and diluted EPS were HK4.94 cents, compared to a loss of HK1.77 cents per share in 2022.

• Net cash generated from operations was HK$361.2 million, up from HK$164.9 million in 2022.

Outlook and guidance

• Plans to expand ophthalmic and dental networks in Hong Kong, Shenzhen, and other Mainland China cities, especially in the Greater Bay Area.

• Favourable policies and GBA development expected to boost demand for quality medical services.

• Strategic focus on operational capacity, service capability, and partnerships for myopia control products.