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BT Finance
As the Chinese New Year approaches, the nucleic acid test has become an indispensable passport for those who are returning home.
According to the Ministry of Transportation, it is expected that this year's national Spring Festival sent about 1.7 billion passengers, a daily average of about 40 million. If the official guide price of 80 yuan / time and do not count every 7 days need to be retested to calculate, light a spring, nucleic acid test market revenue will be as high as at least 136 billion yuan.
With hundreds of billions of dollars of incremental market, nucleic acid testing jumped on the wind, many people did not realize that this business can be too profitable.
First on a set of data, visualize how profitable nucleic acid testing?
You did not read it wrong, the net profit showed dozens of times or even hundreds of times the amazing surge!
According to incomplete statistics, the current nucleic acid testing concept plate has 31 listed companies announced the 2020 performance forecast, of which 29 are growth.
Nucleic acid testing reagents manufacturer Shengxiang Biological is the highest rise in the field of the company, 2020 August only landed on the Science and Technology Innovation Board, known as the "anti-epidemic first shares. 2020 full-year net profit increased 2.52 billion - 2.77 billion yuan, an increase of up to 70 times!
This also makes the founder Dai Lizhong worth more than 15 billion dollars, among the ranks of Forbes billionaires.
Look at another leading nucleic acid testing reagent company, Daan Gene. 2019, Daan Gene is still facing great pressure to survive, the annual net profit declined, only 0.92 billion yuan, but with the business of nucleic acid testing, in the first quarter of 2020 to achieve 186 million yuan of net profit, the 2020 full-year net profit is expected to reach 2.0-2.2 billion yuan, nearly more than four times the combined net profit of the previous five years!
The performance of companies providing nucleic acid testing services is also very bright.
Medical diagnostic giant Dean Diagnostics is expected to earn 712-816 million yuan in 2020, a year-on-year increase of 105%-135%; the largest third-party medical testing organization, Golden Medical, is expected to earn 1.46-1.56 billion yuan in 2020 after accumulating more than 30 million tests in 2020.
Some employees of third-party testing organizations told the media that their companies only passed the qualification audit in May last year, nucleic acid testing has become the highest contributing source of income, the year-end awards were sent in advance, and the salary will be doubled in January this year.
This is not all, in addition to the profit growth rate, nucleic acid testing business there is a shocking figure - gross margin.
As early as March 2020, the state encouraged third-party testing organizations to carry out nucleic acid testing, and public hospitals to implement a dual-track price system. In other words, third-party testing organizations have the right to independent pricing.
At that time, the market price of third-party testing organizations was mostly 200-400 yuan per visit. But what about the actual cost? According to the government's public procurement information can be seen, the average price of extraction reagents is about 10 yuan, the average price of detection reagents about 15 yuan.
In this way, nucleic acid testing reagents can be as high as 80% or more profit! In fact, this is true, Daan Gene in the 2020 semi-annual financial report disclosed that its nucleic acid testing kit products gross profit margin of 85.39%.
Compared to the 60% gross profit margin of Nongfusanquan, it is really more profitable than selling water!
Nucleic acid testing services also need to increase the cost of manpower, equipment, transportation and other costs, the gross profit margin is relatively low, but can also reach about 50%, is also considerable.
Today, nucleic acid testing has become a necessity. The state put forward requirements, county hospitals should have nucleic acid sampling and testing capabilities, which in addition to driving further growth of third-party testing organizations, but also greatly increased sales of related laboratory equipment.
According to reports , Christina Bio's related instruments PCR detector in the 2015-2019 this five-year sales of less than 1,000 units, the results of 2020 only one year, this figure rose to more than 6,000 units. It is reported that some instrument manufacturers have orders lined up for the year after next.
Interestingly, the nucleic acid testing industry has also spawned a number of parochial businesses.
Some people do micro-merchants agents, in the circle of friends and other social platforms to publish third-party testing organizations advertisements, every pull to a head of 5-10 yuan commission. According to media reports, some micro-merchants can introduce 100 or so customers a day, earning about a thousand dollars a day.
However, there are also people who use their brains and choose to sell fake nucleic acid test reports. In a recent absurd news story, a copy store owner in Shanxi issued 11 fake nucleic acid test reports by modifying his name and ID card, earning $200, and as a result, he was administratively detained for 15 days and fined $1,000 ......
Above the windbreak, not everyone can fly up ah. Moreover, I'm afraid that the bonus period of this wind gap can not be maintained for a long time.
Nucleic acid testing is not like a mask, it is a business with a threshold.
The threshold is not the test reagents, but the approval. According to industry sources, pathogenic pathogens related testing reagents, belonging to the third category of in vitro diagnostic reagents, that is, the highest level of review of medical devices, under normal circumstances, nucleic acid testing reagents from R & D to clinical and then to get a license will take 3-5 years, or even longer.
Since the outbreak of the new crown epidemic, the State Food and Drug Administration (SFDA) has quickly launched an emergency approval process for medical devices to speed up approval and expand supply. Some strong leading companies are seizing this opportunity to get on board early and seize the market.
But the problem comes with it. With the lowering of the approval threshold and the entry of a large number of companies, the market has shown signs of oversupply. It is worth mentioning that nucleic acid testing reagents are not To C products, but To B/To G, relying on the centralized procurement of medical institutions.
First of all, the centralized procurement winners tend to be leading companies with strong production capacity and high technology, which is undoubtedly bad news for small companies that want to switch tracks midway to get a share of the wind.
According to public information, as of the end of December, the Drug Administration approved as many as 24 nucleic acid testing reagent products. 2020 since April, the provinces have carried out 16 reagent procurement, and these 24 only 19 companies were shortlisted. Among them, Daan Gene won all the bids, Antu Bio, Oriental Gene and Yosida three companies all won only 1 bid.
More importantly, collective procurement is the direct cause of compression of profit margins.
It can be seen that the official guide pricing in all provinces and cities is being lowered step by step. In Beijing, for example, from the earliest 180 yuan to 120 yuan, and now down to 80 yuan, and can be reimbursed by social security.
The back corresponds to the decreasing purchase price. Hubei is the first to start the new crown test kit centralized procurement of provinces, the final price of the winning bid compared with the collection has been reduced by 81%. 29 January, Jilin Province, the public **** resources trading center is a clear requirement, the price of nucleic acid test kits shall not be higher than the price of 12 yuan / person; viral antibody test kits shall not be higher than the price of 5.8 yuan / person.
To the first batch of nucleic acid test kit registration certificate of one of the enterprises of the river biology, for example, in 2020 the first quarter of the gross margin of the kit is 87.96%, after the collection of reagents after the bidding of the gross margin slipped sharply to 50% or so, the price also jumped from 64.13 yuan / person to 15 yuan / person, a drop of up to 76.61%.
Daan gene price is even lower, in Zhejiang Province, the latest set of procurement, its bid price has fallen to 10 yuan. Shengxiang Biological in 2020 results preview shows that the lowest offer of nucleic acid testing reagents is only 8.88 yuan / person, is about to hit the bottom.
Government orders are large orders, companies in order to win the bid, basically have pressed the price to the extreme.
When an industry starts a price war, it is basically far from profitability.
In addition, the burden on the service side of nucleic acid testing companies to be a little heavier. To expand the market scale, you need to constantly expand the third-party laboratory, which is an asset-heavy business. The cost of the third-party labs, after deducting the cost of the kits, also includes the cost of testing-related instruments, labor, protection, etc.
PCR instruments are sold at around 50,000 yuan per unit, and the better ones cost more than 100,000 yuan, but the detection capacity is limited, and the daily turnaround may only be about a thousand samples. Manpower costs more, nucleic acid extraction is basically done by hand, many companies in order to keep up with the demand, temporary large number of high-paying recruitment of testing personnel. In addition, equipped with protective clothing, goggles, N95 masks, latex gloves, sample preservation tubes, etc. also requires a cost. There are also companies that have built a back office for automated appointments, data management and risk monitoring are invisible expenses.
Once these are invested, they are all big costs, or even a loss. Therefore, the enterprise also need to do some math, can not blindly expand production capacity, or the tide recedes, the naked swimming is their own.
It is reported that Dean Diagnostics is currently the highest daily test measurements for 600,000 cases, the gold medical but 350,000 cases.
It is obvious from the financial report of Goldcorp Medicine that although revenue and profit are accelerating, accounts receivable are also increasing, increasing by 53.83% in the first half of 2020, accounting for 45.71% of the company's total assets; cash flow is even slower, with the payback cycle lengthening from 98 to 212 days, and the cash flow dropping from 95.81% in 2019 to 69.76%, and the net cash ratio fell from 164.43% to 42.99%.
Southwest Securities forecasts that UWG's medical testing revenue will see a 60.5% year-on-year contraction in 2021. Among them, nucleic acid testing reagent sales will shrink from 75 million to 20 million copies.
Even more alarming are those companies with a disproportionately high share of nucleic acid testing performance, will they be able to maintain their current high valuations once their business shrinks significantly?
Currently, nucleic acid testing reagents are still in the "thin profit, high sales" dividend stage. However, with the global epidemic control, the new crown vaccination and the advancement of detection technology, the supply and demand will be further rationalized.
In order to maintain their own profits, many third-party testing organizations have introduced some value-added services. For example, by "timeliness" and "high efficiency" to attract business, the launch of the two-hour door, two hours out of the results.
However, these are not a permanent solution. Perhaps you can look overseas.
According to customs statistics, in 2020, China exported 1.08 billion copies of the new coronavirus test kits, as of January 29, 2021, there are 547 companies of the new coronavirus test kits to obtain the certification of the EU standards.
At present, the nucleic acid test kits of many listed companies, such as Huada Genetics, Mike Bio, Fosun Pharmaceuticals, Anthem Pharmaceuticals, and Shengxiang Biologicals, have been certified by the U.S. FDA.
In the case of Europe and the United States epidemic is still continuing to deteriorate, with the export qualification of the enterprise is undoubtedly more a way to make money, and the profit is not expensive.
It is reported that China's current single-day detection capacity of up to 100 million people, while the United States in September last year, the single-day detection capacity also exceeded 100 million people, the market demand is huge.
Compared to the low price of China's government procurement, the U.S. market price of the kit can be as high as about 2,000 U.S. dollars (about RMB), China's production and export price of about 40 yuan, also known as profiteering!
According to foreign media reports, the United States, a woman in the free testing station to do after the nucleic acid test, but was told to pay 2718 U.S. dollars (about 18,000 yuan), of which 210 U.S. dollars nucleic acid test fee (about 1359 yuan), the remaining 2508 U.S. dollars for laboratory services, the price is smashing.
And U.S. insurers don't pay for lab services. For some companies that have labs overseas, this is certainly a lucrative deal.
According to media reports, some companies optimistically estimate that sales of kits exported to Europe, the United States, Japan, South Korea and other countries in 2020 could bring in nearly one-third of their own net profit in 2019.
WuXi AppTec pointed out in its financial report that with the faster growth of orders from overseas customers, as well as the continuous improvement of the company's capacity utilization and operational efficiency, the company's overall 2020 second-half operating income to achieve a strong growth of more than 30% year-on-year. Daan Gene has also said on the interactive platform, the current export sales of nucleic acid testing reagents accounted for about 20%.
Some industry insiders said that the new crown to the nucleic acid testing industry has brought an outbreak of opportunities, but as the epidemic gradually tends to the new normal, nucleic acid testing will not always be the most profitable segment of these leading companies.
In fact, from the nucleic acid testing where the ICL (third-party medical testing and diagnostic pathology business) industry's commercial characteristics, is destined to be a thin business.
ICL is a labor-intensive industry with a long supply chain, many links involved, and high costs. The leader will survive better because there are more stable operations and economies of scale that can continue to make money. However, due to the low technological threshold, it is difficult for a monopoly oligopoly to emerge.
From the point of view of market development, according to the National Health Planning Commission forecast, ICL (third-party medical testing and pathology diagnostic business) industry will maintain a high annual growth rate of 30% in the next few years, in 2020 it will be more than 25 billion yuan, in 2021 it will be more than 30 billion yuan.
Simply put, the market is there, the money can be earned, but do not expect profiteering every day, nucleic acid testing of the wind mouth is tightening, you are sure you want to get on the car?
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