Opcon Vision Faces "Double Kill" in Performance and Stock Price: An Overcrowded Market and Is the Nearly 900 Million Goodwill Impairment Sufficient?

Produced by: Sina Finance Listed Companies Research Institute

By/ Xiachong Studio

Key takeaways: Opotek Vision’s 2025 performance continued to deteriorate; revenue inched up by 2.6%, but net profit fell sharply by 16.2%. The company’s core products are experiencing a sustained decline. The company is facing the “Davis double whammy”—on one hand, the OK lens track appears to have shifted from a blue ocean to a red ocean, and amid intensifying competition the company’s gross margin is showing a downward trend; on the other hand, substitute products such as defocus frame lenses and atropine are strongly siphoning off market share. Meanwhile, the company has accumulated nearly RMB 900 million in goodwill on its balance sheet, but some acquired targets’ performance no longer meets expectations; the company did not record impairment. So, is the impairment of the related goodwill sufficient?

Recently, Opotek Vision released its 2025 annual report, with earnings continuing to decline.

The 2025 annual report shows that in 2025, operating revenue was RMB 1.861 billion, up 2.62% year over year; net profit attributable to shareholders was RMB 480 million, down 16.2% year over year.

Behind this comparatively poor performance, the company is seeing its fundamental business continue to slide. Sales of products in the hard contact lens category mainly come from the company’s core products—corneal reshaping lenses. In this reporting period, hard lens sales revenue decreased 2.90% year over year, compared with a 6.73% decline in the same period last year. At the same time, the company’s profitability is further pressured by asset impairment and other factors. In 2025, Opotek Vision recorded impairment provisions of various types totaling approximately RMB 74.9867 million, of which the amount of goodwill impairment losses recorded reached as much as RMB 39.9740 million.

Behind the “Davis double whammy”: a crowded track

Opotek Vision’s business revenue mainly comes from product sales and medical services. Product revenue is divided into four major categories: hard contact lens products (corneal reshaping lenses (OK lenses) as the core fundamental product), nursing/care products, frame lenses and other optometry-related products and technology services, and non-optometry products (including medical consumables, wholesale of medical devices, etc.).

Between 2019 and 2021, Opotek Vision leveraged the exclusive advantage of corneal reshaping lenses (OK lenses). Its revenue growth once approached 50%, and net profit growth exceeded 30%, portraying a high-growth myth. At the same time, the company’s valuation once approached the one-trillion-yuan level.

Then, Opotek Vision switched from the high-growth myth to the reality of the Davis double whammy—suffering the dual predicament of having both performance and valuation hit at the same time.

Opotek Vision’s performance turning point quietly appeared after 2022. The company’s revenue growth rate slid step by step like a waterfall—from nearly 18% down to below 3% in 2025, with its growth engine clearly sputtering. The more severe challenge lies on the profit side. Since 2024, both the company’s net profit and net profit attributable to shareholders have turned negative year over year, and the decline has continued for two consecutive years. Meanwhile, in terms of share price, the company’s stock price has crashed by nearly 90% from its peak.

In terms of share price, the company’s share price has fallen by nearly 90% from its highest point. Currently, the company’s market value is only RMB 12.7 billion.

According to an Observational Research report, driven by strong demand for myopia prevention and control and factors such as policy, in recent years the market size for corneal reshaping lenses in China has continued to expand, rising from RMB 6.4 billion in 2018 to RMB 16.869 billion in 2022. The CAGR reached 21.39%, and the market size is expected to approach RMB 70 billion by 2030.

Against this backdrop, the corneal reshaping lens track has also become unusually crowded. From a handful of companies in the past to more than 20 now—domestically, already approved corneal reshaping lenses or more than 24 SKUs. Only in the first four months of 2025, three products were approved. Companies such as Aibonoerd, Gaoshi Medical, Haisco Bio, Lepu Medical, Lermy Vision, Shiji Kangtai, Well Vision, Yandeyule, etc. have new corneal reshaping lens products in development; the number of products in the future will further expand.

Amid such intense competition, Opotek Vision’s gross margin has shown a downward trend in recent years. In 2021, the company’s gross margin was 76.69%, while in 2025 it has already fallen to 72.46%.

At the same time, the track the company is in also has substitute products diverting demand.

According to the “China Corneal Reshaping Lens Industry Development Trend Research and Future Investment Analysis Report (2025–2032)” released by the Guanyan Research report website, currently the correction and control of myopia are mainly divided into several categories. According to the myopia prevention and treatment guideline (2024 edition) released by the National Health Commission, 1) Frame spectacles: simple and safe. Among them, frame spectacles with special optical designs (such as defocus frame lenses) have a certain control effect for children whose myopia progression is faster; 2) RGP rigid gas-permeable contact lenses: suitable for any age group that has a need but no contraindications; 3) OK lenses: reversible; physical optical correction. Long-term wear can delay the progression of axial length, and temporarily reduce a certain amount of myopia diopter values; 4) Soft contact lenses: multifocal soft lenses can, to a certain extent, delay children’s myopia progression; 5) Low-concentration atropine drug therapy.

According to Aier Eye Hospital’s disclosure, in actual clinical scenarios, the selection ratio between OK lenses and defocus frame spectacles is about 1:5, which means that among every 6 myopia patients, only 1 ultimately chooses OK lenses. This may also further validate how related products have impacted the company’s core fundamental business.

In fact, the company also mentions in its annual report that its sales revenue currently mainly comes from corneal reshaping lenses and related products, as well as eye care and optometry services. Corneal reshaping lenses have relatively high usage costs and belong to high-end consumer medical devices. During the reporting period, the domestic high-end consumer market continued to show weakness; if this trend continues, it will continue to affect the company’s operating performance. In addition, the number of registered brands for corneal reshaping lenses is increasing, and competition in the market is intensifying. At the same time, products such as low-concentration atropine, soft defocus-reducing contact lenses, functional frame spectacles, and phototherapy instruments are also entering the adolescent myopia prevention and control market, grabbing market share and creating unfavorable impacts on the company’s sales growth.

How well do high-premium acquisition targets perform? Is the RMB 800 million goodwill impairment sufficient?

On the evening of July 4, 2025, Opotek Vision announced that it plans to use RMB 334 million to acquire 75% of the equity interests of Suqian Shangyue Qicheng Hospital Management Co., Ltd. (hereinafter referred to as “Shangyue Qicheng”). Of the consideration, it plans to use RMB 234 million from fundraising proceeds and RMB 100 million from its own funds. After the acquisition is completed, Shangyue Qicheng will become a controlling subsidiary of the company and will be included in the scope of the company’s consolidated financial statements.

It is worth noting that this acquisition is a high-premium deal. The assessed value of all shareholders’ equity of Shangyue Qicheng is RMB 454 million, representing a premium rate of 771.49% compared with its book net assets of RMB 52.1461 million. With such a high premium, performance commitments were also provided. Specifically, Shangyue Qicheng committed that its actual non-recurring profit would not be lower than RMB 39.0 million, RMB 46.8 million, RMB 53.82 million, RMB 59.2 million, and RMB 59.2 million for 2025 through 2029 in sequence. If the performance during the commitment period fails to meet expectations, Opotek Vision may request the promisor to compensate in cash or in equity, or require a repurchase of the equity interests.

In recent years, the company’s goodwill has been rising steadily. The book value of goodwill in 2025 is RMB 884 million.

In 2025, some targets achieved performance in the previous year but did not achieve it in 2025. It is worth noting that for certain targets that failed to meet performance, no related goodwill impairment was recorded. According to the announcement, Chongqing Ruiyue Shikang Medical Technology Co., Ltd., Lingbi Anjin Hospital Co., Ltd., Cangzhou Yutong Health Management Co., Ltd., Panzhihua Shizhong Medical Technology Co., Ltd., Huizhou Aopu Jiasi Health Management Co., Ltd., Chuzhou Shengkang Technology Co., Ltd., and Jiangxi Mingmou Enterprise Management Co., Ltd.—these 7 companies did not complete their performance commitments for the current period. The company stated that it expects that future cash flows will not lead to indications of goodwill impairment.

Taking Chongqing Ruiyue Shikang Medical Technology Co., Ltd. as an example, its performance completion rate was 105% in 2024, but in 2025 it turned around to 85%. The expected revenue growth rate used in the impairment test for this target is -14.44% to -3.18%. It is quite puzzling that with the target under such performance pressure, whether the related goodwill impairment is sufficient.

We note that Shangyue Qicheng’s performance in 2025 was RMB 41.9978 million, and the completion rate of its performance commitment was 107.69%. With such a high-premium acquisition, the performance completion level does not seem to be significantly beyond expectations. Should we be alert to the risk that related goodwill may conceal an impairment “time bomb”?

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Responsible editor: Company Observer