Health & Beauty

In the past month or two, the business of selling new crown detection reagents to Europe and the United States has not been easy.

Data from the General Administration of Customs shows that the export value of new coronavirus (COVID-19) testing kits has dropped sharply since reaching a peak of 18.024 billion yuan in February this year. From March to May this year, its export value was 14.591 billion yuan, 3.911 billion yuan and 1.813 billion yuan respectively; the month-on-month declines reached 19.05%, 73.19% and 53.64% respectively.

Among them, the export value of domestic new crown reagents in May was only one-tenth of that in January, mainly to Germany, the United States and Hong Kong SAR of China. Compared with April, the value of imports of domestically produced new crown reagents in the United States has dropped by more than 20%, and the value of imports from Germany and Hong Kong SAR has both dropped by more than 50%.

New crown detection reagents are mainly divided into three types: nucleic acid detection, antigen detection and antibody detection. Among them, antigen detection is difficult to select and prepare antibodies, and the approval time is late. However, due to the simple detection operation and fast detection speed, it is widely used in overseas countries with severe epidemics. Since the first half of 2020, the nucleic acid detection and antibody detection reagents of BGI, Mike Bio, Orient Bio, and Shengxiang Bio have been certified by the US Food and Drug Administration (FDA). From the second half of 2021, the antigen detection reagents of Aikang Bio, Jiu'an Medical, and Oriental Bio have also been certified by the FDA.

According to the report of Guotai Junan Securities, as of the end of 2021, more than 70 domestic companies have obtained EU CE certification for new crown detection reagents, and nearly 30 companies have obtained US EUA certification. As for antigen testing, data from the Gaohe Investment Research Center shows that there are more than 200 companies selling COVID-19 antigen kits worldwide, of which more than half are approved by domestic brands. During this period, the export value of my country's diagnostic reagents increased from 34.9 billion yuan in 2020 to 84.6 billion yuan in 2021, a year-on-year increase of 143%. This figure was only 3.5 billion yuan in 2019.

Under the repeated overseas epidemics, the surge in demand has caused the performance of many testing companies to skyrocket. According to the 2021 annual report of Orient Bio, as the sales performance of new coronavirus antigen rapid detection reagents (including home self-test) products in the European market continued to increase significantly, the company's revenue and net profit attributable to the parent increased by 211.43% and 193.33% respectively compared with the previous year. .

In the 2021 performance pre-increase announcement, Boto Biotech pointed out that due to the influence of mutated viruses such as the new crown virus Delta and Omicron, the number of new crown infection cases in Europe, Australia and other countries and regions continued to maintain a large increase, and the number of new crown antigen detection reagents The demand has increased significantly, and the company's overseas new crown testing reagent orders and revenue have increased significantly, resulting in a substantial increase in sales performance in 2021 compared with the same period last year.

After the performance of Jiu'an Medical soared in 2020 and 2021, the momentum has not diminished. In the first quarter of 2022, the company's revenue exceeded the total since its listing in 2007 to 2021, reaching 21.737 billion yuan, and the net profit attributable to the parent was 14.312 billion yuan, a year-on-year increase of 6646.79% and 37527.35% respectively. The annual report pointed out that the substantial growth in the company's performance was mainly driven by iHealth's new crown antigen home self-test OTC kit product business. In 2020 and 2021, the company's overseas market revenue accounted for more than 80% and 90%, respectively.

In 2021, Rejing Bio will achieve revenue of 5.369 billion yuan, a year-on-year increase of 945.54%. It also stated in the annual report that the company will seize the opportunity of the continuous spread of the new crown epidemic in Europe in 2021, and focus on promoting the marketization of products such as the new crown virus antigen detection kit. increase in magnitude.

However, the fierce competition under the sharp increase of entrants has also caused the price of the kit to drop rapidly. The report of Guotai Junan Securities shows that in 2020, 1.08 billion new crown detection reagents will be exported domestically, and the export price per person is estimated to be about 30 yuan; and by the end of 2021, the cumulative domestic export of more than 8.4 billion detection reagents, it is estimated based on this. About 7.3 billion copies of new crown detection reagents were exported, and the export price for a single copy dropped to about 12 yuan.

Coupled with the adjustment of overseas epidemic prevention policies, the revenue composition and gross profit margin of some companies have changed. From 2020 to 2021, the proportion of Zhijiang Bio’s overseas revenue will drop significantly from 22.85% to 6.35%; overseas gross profit margin will drop from 85.97% to 77.01%. The proportion of overseas income of Shengxiang Bio decreased from 52.75% to 39.31%.

However, the new crown detection reagents have long been included in the centralized procurement in China, and the profit margin is extremely limited. With the sharp drop in export volume, the dividends in this field are coming to an end, and relevant testing reagent companies have begun to look for opportunities for industrial integration and investment.

In June 2021, Shengxiang Bio, which landed on the Science and Technology Innovation Board during the epidemic, acquired a 14.77% stake in Zhenmai Bio, a research and development manufacturer of upstream equipment and reagents for the gene sequencing industry, for 255 million. In December, Wanfu Bio acquired Tianshen Medical, a domestic chemiluminescence company, to expand its innovative layout in the field of chemiluminescence. In the same month, Rejing Bio also acquired a 38.1% stake in Aorui Bio, a cancer early screening company, at a price of 153 million yuan, and then invested 50 million yuan to participate in the establishment of Huimei Investment. In the past year, Orient Bio has successively invested 30 million yuan to subscribe to the Yikang Investment Fund, acquired Beijing Shouyi Clinical Medical Technology, invested in the construction of the Orient Gene Biochip Production and Research Base Project, and set up factories in the United Kingdom and the United States.