China Rebound in Early Innings; Upgrading to OUTPERFORM, PT $40

研报英文原文证据摘录

China Rebound in Early Innings; Upgrading to OUTPERFORM, PT $40

Earnings Highlights

China Recovery Exceeding Expectations: China net sales of $47.4M represented the most

significant positive surprise of the quarter (note STAA previously released preliminary 1Q’26

revenue “in excess of $90M”), coming in above our estimate and above consensus. To put this in

context, STAA generated negative China revenue of ($0.9)M in 1Q’25 due to the deliberate

inventory destocking, so the YoY comparison is essentially meaningless. However, the more

important data point is that $47.4M is the highest China quarterly revenue since 3Q’25 ($55.8M,

which was inflated by the $25.9M recognition of the Dec’24 China Shipment) and approaches

normalized run-rate levels not seen since 2023–2024. Management was emphatic that this was

demand-driven: distributor inventory ended the quarter at or below 4Q’25 levels and within the

six-month contractual target and confirmed that sales to the market approximated sales into the

market, which is the dynamic the company has been trying to achieve since the inventory crisis

began. The strong launch of EVO+ ICL in China (premium-priced, manufactured in Switzerland tariff-

free) was a contributor, with management noting that demand exceeded expectations and

required higher production output from the Nidau facility than originally planned. Management

expects to fully meet EVO+ supply demand by end of 2Q’26. Importantly, management

characterized Eyebright, the Chinese ICL competitor that entered the market ~12 months ago, as a

non-issue thus far, noting it offers only a sphere lens (no toric) and that surgeons are taking a

measured approach to alternative lenses to STAA.

US Continues to Grow: US net sales of $6.7M (+22% YoY) surpassed $6M for the first time in a