Is nucleic acid testing a good business? The net profit of listed companies has soared dozens of times.

These companies will become "crazy rich" in 22 by doing nucleic acid testing.

Wen Shu BT Finance

As the Spring Festival approaches day by day, nucleic acid has proved to be an indispensable passport for people returning home.

According to the forecast of the Ministry of Transport, about 1.7 billion passengers were sent during Spring Festival travel rush this year, with an average of about 4 million passengers per day. Based on the official guidance price of 8 yuan/time and the need for retesting every seven days, the market income of nucleic acid testing will reach at least 136 billion yuan for a trip to Spring Festival travel rush alone.

With a market increment of 1 billion, nucleic acid detection has jumped to the forefront, which many people have not found. This business is too profitable.

Let's start with a set of data, and intuitively feel how profitable nucleic acid detection is.

you are not mistaken, the net profit has shown an amazing explosion of dozens or even hundreds of times!

According to incomplete statistics, at present, 31 listed companies in the concept section of nucleic acid detection have published their performance forecasts for 22, of which 29 are growth.

Shengxiang Bio, a manufacturer of nucleic acid detection reagents, is the company with the highest increase in this field. It only landed in science and technology innovation board in August 22 and is called "the first anti-epidemic company". In 22, the net profit will increase by 2.52 billion-2.77 billion yuan, with a growth rate of 7 times!

This also makes founder Dai Lizhong worth more than 15 billion yuan, ranking among Forbes billionaires.

Look at Daan Gene, another leading nucleic acid detection reagent company. In 219, Daan Gene is still under great pressure to survive, and its annual net profit declined to 92 million yuan. However, with the business of nucleic acid testing, it achieved a net profit of 186 million yuan in the first quarter of 22, and the annual net profit in 22 is expected to reach 2-22 billion yuan, almost four times the sum of the net profits of the previous five years!

The performance of companies providing nucleic acid detection services is also very bright.

Dean Diagnostics, a giant medical diagnosis institution, predicts a profit of 712-816 million yuan in 22, an increase of 15%-135% year-on-year; Jinyu Medical, the largest third-party medical testing institution, has detected more than 3 million people in 22, and it is estimated that it will make a profit of 1.4-1.56 billion yuan in 22.

employees of a third-party testing organization told the media that their company only passed the qualification examination in May last year, and nucleic acid testing has become the highest contribution source of income. The year-end awards have been paid in advance, and the salary will be doubled in January this year.

That's not all. In addition to the profit growth, the nucleic acid testing business also has an amazing figure-gross profit margin.

as early as March 22, the state encouraged third-party testing institutions to carry out nucleic acid testing, and implemented a two-track price system with public hospitals. In other words, third-party testing institutions have independent pricing power.

At that time, the market price of third-party testing institutions was mostly 2-4 yuan/person. But what about the actual cost? According to the procurement information disclosed by the government, the average price of extraction reagents is about 1 yuan, and the average price of detection reagents is about 15 yuan.

In this way, the profit of nucleic acid detection reagents can reach more than 8%! In fact, this is indeed the case. Daan Gene disclosed in the semi-annual financial report in 22 that the gross profit margin of its nucleic acid detection kit products was 85.39%.

compared with the gross profit margin of 6% of Nongfu Spring, it is indeed more profitable than selling water!

nucleic acid testing service institutions also need to increase the cost of manpower, equipment, transportation, etc. The gross profit margin is relatively low, but it can also reach about 5%, which is also considerable.

nowadays, nucleic acid detection has become an urgent need. The country requires that all county-level hospitals should have the ability of nucleic acid sampling and detection, which not only drives the further growth of third-party testing institutions, but also greatly increases the sales of related experimental equipment.

It is reported that in the five years from 215 to 219, the sales volume of related instruments PCR detector in Shengxiang Bio was less than 1,. As a result, in 22 alone, the number rose to more than 6,. It is reported that some instrument manufacturers' orders have been placed in the following year.

interestingly, the nucleic acid detection industry has also spawned many partial businesses.

Someone started acting as an agent in Wechat business, posting advertisements of third-party testing institutions on social platforms such as friends circle, and getting a commission of 5-1 yuan for each person. According to media reports, some Wechat business can introduce about 1 customers a day and earn about 1, yuan a day.

However, some people choose to sell fake nucleic acid test reports. Recently, an absurd news, the owner of a copy shop in Shanxi issued 11 false nucleic acid inspection reports by modifying his name and ID card, and earned 2 yuan. As a result, he was administratively detained for 15 days and fined 1 yuan ... < P > Not everyone can fly. Moreover, the dividend period of this tuyere may not last long.

unlike masks, nucleic acid testing is a business with a threshold.

The threshold is not to be a testing reagent, but to be approved. According to people in the industry, the detection reagents related to pathogenic pathogens belong to the third category of in vitro diagnostic reagents, which is the highest level of examination in medical devices. Under normal circumstances, it takes 3-5 years for nucleic acid detection reagents to go from research and development to clinical practice and then to obtain certificates, or even longer.

Since the outbreak of COVID-19, the State Drug Administration has quickly started the emergency examination and approval procedures for medical devices, speeding up the examination and approval and expanding the supply. Some powerful leading enterprises seized this opportunity, got on the bus early and seized the market.

but problems also follow. With the lowering of the approval threshold and the entry of a large number of enterprises, the market has shown signs of oversupply. It is worth mentioning that nucleic acid detection reagents are not To C products, but To B/To G, which depends on the centralized procurement of medical institutions.

first of all, the successful bidders in centralized procurement tend to be leading enterprises with strong production capacity and high technology, which is undoubtedly bad news for small enterprises that want to share a piece of the action by changing tracks halfway.

According to public information, by the end of December, there were as many as 24 products of nucleic acid detection reagents approved by the Food and Drug Administration. Since April 22, 16 reagent collections have been carried out in various provinces across the country, and only 19 enterprises from these 24 companies have been shortlisted. Among them, Daan Gene all won the bid, and Antu Bio, Dongfang Gene and Yousida all won the bid only once.

more importantly, centralized purchasing is the direct cause of reducing profit space.

as you can see, the official guidance pricing in all provinces and cities is decreasing step by step. Take Beijing as an example, it has been reduced from 18 yuan to 12 yuan, and now it has been reduced to 8 yuan, and it can be reimbursed by social security.

behind it is the declining purchase price. Hubei is the first province to start centralized procurement of test kits in COVID-19, and the final bid price has been lowered by 81% compared with that before centralized procurement. On January 29th, Jilin Provincial Public Resource Trading Center made it clear that the price of nucleic acid detection kit should not be higher than 12 yuan/person in principle; The price of virus antibody detection kit shall not be higher than 5.8 yuan per person in principle.

Take Zhijiang Bio, one of the first enterprises to obtain the registration certificate of nucleic acid detection kit, as an example. In the first quarter of 22, the gross profit margin of the kit was 87.96%. After centralized procurement, the gross profit margin of the winning reagent dropped to about 5%, and the price dropped from 64.13 yuan/person to 15 yuan/person, with a drop of 76.61%.

The price of Daan gene is even lower. In the latest collection in Zhejiang Province, the bid price has dropped to 1 yuan. Shengxiang Bio showed in the 22 performance forecast that the lowest price of nucleic acid detection reagents was only 8.88 yuan/person, which was about to bottom out.

government orders are big orders, and enterprises have basically pushed the price to the extreme in order to win the bid.

when an industry starts a price war, it is basically far from profit.

in addition, the burden on the nucleic acid detection server enterprises is even heavier. In order to expand the market scale, it is necessary to continuously expand the third-party laboratories, which is an asset-oriented business. The cost of third-party laboratories excludes the purchase of kits, and also includes related instruments, manpower, protection costs and so on.

the market price of PCR instruments is about 5, yuan/set, and the better ones are more than 1, yuan, but the detection ability is limited, and the number of samples rotated continuously every day may be only about 1,. The manpower cost is higher, and the nucleic acid extraction is basically done manually. In order to keep up with the demand, many enterprises temporarily recruit a large number of testing personnel with high salaries. In addition, it costs a sum of money to equip with protective clothing, goggles, N95 masks, latex gloves and sample storage tubes. Other companies have set up the background of automatic reservation, and data management and risk monitoring are invisible expenses.

once these are invested, they are all costly, and they may even lose money. Therefore, enterprises should also calculate the accounts, and can't blindly expand the production capacity, otherwise the tide will recede and the naked swimmer will be himself.

It is reported that the maximum daily detection volume of Dean's diagnosis is 6,, while that of Jinyu Medicine is only 35,.

It can be clearly seen from the financial report of Jinyu Medical that although the revenue and profit are accelerating, the accounts receivable are also increasing, increasing by 53.83% in the first half of 22, accounting for 45.71% of the company's total assets; The cash return is slower, the payment cycle is extended from 98 days to 212 days, the cash flow is reduced from 95.81% in 219 to 69.76%, and the net cash ratio is reduced from 164.43% to 42.99%.

Southwest Securities predicts that BGI's medical testing revenue will shrink by 6.5% year-on-year in 221. Among them, the sales volume of nucleic acid detection reagents will shrink from 75 million to 2 million.

What is more alarming is that those companies whose performance in nucleic acid testing accounts for a high proportion can still maintain their current high valuation once their business shrinks sharply.

At present, nucleic acid detection reagents are still in the dividend stage of "small profits but quick turnover". However, with the global epidemic control, COVID-19 vaccination and detection technology progress, supply and demand will further become rational.

in order to maintain their own profits, many third-party testing institutions have launched some value-added services. For example, relying on "timeliness" and "high efficiency" to attract business, we launched a 2-hour door-to-door and 2-hour results.

however, these are not long-term solutions. Maybe we can look overseas.

according to customs statistics, in 22, China exported 1.8 billion test kits to Covid-19, and by January 29th, 221, 547 companies had obtained the EU standard certification for Covid-19 test kits.

At present, the nucleic acid detection boxes of several listed companies, such as Huada Gene, mike biological, Fosun Pharma, Antu Medicine and Shengxiang Bio, have passed the certification of FDA.

As the epidemic situation in Europe and America continues to worsen, enterprises with export qualifications will undoubtedly have another way to make money, and the profits will be high.

It is reported that China's current single-day detection capacity can reach 1 million person-times, while the United States also exceeded 1 million person-times in September last year, and the market demand is huge.

compared with the low price collected by our government, the market price of kits in the United States can be as high as 2 dollars (about RMB), and the production and export price in China is about RMB in 4 yuan, which is also a huge profit!

according to foreign media reports, a woman in the United States was told to pay $2,718 (about RMB 18,) after completing the nucleic acid test at a free testing station, including $21 (about RMB 1,359) for the nucleic acid test and $2,58 for the laboratory service, which was staggering.

American insurance companies don't pay for laboratory services. For some enterprises that have laboratories overseas, this is undoubtedly a lucrative business.

According to media reports, some companies are optimistic that the sales of kits exported to Europe, America, Japan and South Korea in 22 will bring about nearly one-third of their own net profit in 219.

Wuxi pharmatech pointed out in the financial report that with the rapid growth of overseas customers' orders and the continuous improvement of the company's capacity utilization and operating efficiency, the company's overall operating income in the second half of 22 achieved strong growth, with a year-on-year increase of more than 3%. Daan Gene also said on the interactive platform that the export sales of nucleic acid detection reagents currently account for about 2%.

Some insiders said that COVID-19 has brought an outbreak opportunity to the nucleic acid detection industry, but with the epidemic gradually approaching the new normal, nucleic acid detection will not always be the most profitable sector for these leading enterprises.

in fact, judging from the commercial characteristics of the ICL (third-party medical examination and pathological diagnosis business) where nucleic acid testing is located, it is doomed to be a long-running business.

ICL is a labor-intensive industry with long supply chain, many links involved and high cost. The leading enterprises will survive better, because they have relatively stable operation and economies of scale, and can continue to make money. However, due to the low technical threshold, it is difficult to have a monopoly oligarchy.

from the perspective of market development, according to the forecast of the national health and family planning commission, the industry of ICL (third-party medical examination and pathological diagnosis business) will maintain a high-speed growth of 3% annually in the next few years, exceeding 25 billion yuan in 22 and 3 billion yuan in 221.

To put it simply, there is a market and money can be made, but don't expect huge profits every day. The outlet for nucleic acid testing is tightening. Are you sure you want to get on the bus?

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