Why did revenue growth not produce a comparable increase in profit?

  • In the third quarter of 2026, Eyebright’s revenue was 520 million yuan, up 45% year on year and broadly in line with Goldman Sachs’s previous forecast of 534 million yuan. Management said growth came mainly from the consolidation of Delta Medical, with higher contact lens sales also contributing.
  • Net profit for the same period was 83 million yuan, up 8% year on year and slightly below Goldman Sachs’s previous forecast of 93 million yuan. The company said that promoting both product categories required substantial selling expenses, so revenue growth did not translate into an equivalent increase in profit.

What constraints do the intraocular lens and contact lens businesses face?

  • Goldman Sachs believes tighter medical insurance reimbursement policies and the suspension of cataract screening programs have weighed more heavily on intraocular lens sales than previously expected. Intensifying competition in contact lenses has also limited margin expansion, weakening the business’s contribution as a near-term growth driver.
  • Company management said the renewal of the centralized procurement agreement for intraocular lenses could be finalized within the next month. The company currently expects a modest price reduction, but the details remain unclear.
  • Goldman Sachs remains positive about the long-term effects of premiumization in intraocular lenses and rising penetration of orthokeratology lenses, and believes current earnings weakness is primarily policy-driven. However, the timing of a recovery in cataract surgery volumes remains unclear.

How has Goldman Sachs adjusted its earnings and valuation assessment?

  • Goldman Sachs maintained its revenue forecasts for 2026 through 2028 at 1.959 billion yuan, 2.247 billion yuan and 2.559 billion yuan, respectively. It cut its net profit forecasts for the same period by 9.8%, 9.2% and 8.3%, respectively, to 306 million yuan, 381 million yuan and 485 million yuan.
  • Goldman Sachs lowered its 12-month price target from 52 yuan to 48 yuan and maintained its Neutral rating. The bank is waiting for clearer signs of a recovery in cataract surgery volumes and improved profitability in businesses other than intraocular lenses.