China LASIK Forcast 2013 - 2023

Forecast of Laser Refract ive Surgery in China: 2013 -2023

F i n a n c i a l G r o w t h The model in Table 1 shows an Expected, Low and High estimates in order to bracket the limits on probable performance. This approach provides valuable information, but by combining all the best and worst case extremes in the Low and High columns, the Low and High columns likely exaggerate real events. Table 2 shows the Low and High CAGR for the model holding the ASP at $750 per eye and estimating time to market maturity at 10 years. Given the constraints on ASP mentioned in Appendix 1, and the procedure growth rates shown in Figure 2, this seems like a plausible scenario. Using this approach, the Low forecast shows a CAGR of only 0.63% and the High model is pared to a 10 year CAGR of 24.25%, which is in line with the growth seen in the pharmaceutical sector in China. xvii

Figure 3 (see page 22) graphs the expected growth of the population and market size for laser refractive surgery, and of the market penetration, over time.

PROCEDURE VOLUME CAGR TO ACHIEVE MARKET MATURITY

Figure 4 applies the model to project the potential market for selected cities.

Figure 2: Compounded annual growth rates (CAGR) required to achieve the expected annual procedure volumes of 2.9 million procedures per year, based on different times to maturity. The 10-year, 11.75% CAGR is used to create the Expected financial model.

Page 20