I, the current global epidemic situation
At present, the global epidemic of new crown pneumonia is still at a high level of epidemic, the domestic epidemic of multi-point dissemination, the flow of people gathered during the holidays increased, the risk of epidemic dissemination increased, the prevention and control of the situation is still complex and severe. In response to the recent epidemic situation in China, on September 9, 2022, Wu Zunyou, chief epidemiologist of the CDC, issued an article saying that recently, the epidemic of new coronary pneumonia in China has been occurring one after another, and the main reason for the current severe epidemic situation is attributable to both the surrounding environment and the mutated virus. Recently, China's new crown pneumonia outbreak, the daily number of confirmed cases reported and the number of asymptomatic infected people in more than 1,000 cases of severe situation, has lasted for about a month. This is since the Wuhan epidemic, in addition to the Shanghai epidemic, China's new crown epidemic situation is the most serious and complex. Then look at foreign countries, most countries in Europe and the United States have relaxed the epidemic prevention and control measures, including weakened detection efforts, or the number of reports to reduce (the base is already very large), caused by human factors in Europe and the United States, the epidemic is not a serious illusion. Europe and the United States in the previous four waves of the new crown epidemic, there is the view that a considerable proportion of people have occurred in the natural infection, especially the fourth wave of the Omicron strain epidemic, resulting in a large proportion of the population infected with this natural infection + vaccine immunization, resulting in a population of the protective effect, better than that produced by vaccination alone. Similar views occupy a greater influence abroad, leading to high levels of recurrence and complexity in global epidemics.Second, nucleic acid testing industry chain analysis
Since the completion of the first large-scale nucleic acid testing in Wuhan in May 2020 for about 9.9 million people, as the most important judgmental criterion for diagnosing new coronary pneumonia, the nucleic acid universal screening has become an important means of coping with the disseminated outbreaks across the country. The evolution of different strains over the past two years has led to multiple outbreaks in many places, further contributing to the aforementioned massive 11.5 billion testing trips. Earlier this year in May, the State Council Joint Prevention and Control Mechanism teleconference proposed to establish a 15-minute walk nucleic acid "sampling circle" in major cities to broaden the scope of monitoring and channels. Beijing, Shanghai, Hangzhou, Ningbo and other places have introduced nucleic acid testing requirements, and layout construction of nucleic acid sampling points. According to the Hangzhou news release, Hangzhou city will set up no less than 10,000 sampling points to facilitate the public close to the test, the normalization of nucleic acid testing policy from April 28th, followed by the completion of a nucleic acid test within 48 hours. Under the policy of requiring normalized nucleic acid testing around the world, according to Pacific Securities research report estimates, if the policy is extended to the whole country, the test penetration rate of 40% calculation, only nucleic acid testing services in a single month the market size of 15.4 billion yuan, half a year is up to 92.2 billion yuan. This does not include testing services upstream reagents, consumables and huge raw materials market. Hundreds of billions of market cake temptation, the entry of enterprises in an endless stream. (Looked at more than 50 nucleic acid testing concept of listed companies in the half-yearly report, there is no one company on the market size description, because this market measurement is not easy to calculate, part of the listed companies a first half operating income reached more than 20 billion yuan, there is no authoritative data release, so this 92.2 billion can only be used as a reference). According to Southwest Securities calculations, the normalization of nucleic acid brought about by nucleic acid testing-related demand for more than 130 billion, of which 40 billion yuan of upstream equipment, midstream reagent market 28 billion yuan, downstream responsible for the detection of the ICL (independent medical laboratory) track 68 billion yuan. Anxin Securities research report has mentioned that, according to the mainstream reagent manufacturers data estimates, colloidal gold kit per average production costs (direct materials, direct labor and manufacturing costs) is about 1-2 yuan, nucleic acid kit per average production costs of about 3-5 yuan. According to Soochow Securities Research Institute's estimation, if normalized nucleic acid testing is implemented in China's major cities (first and second tier cities) in the future, the population involved will be about 505 million. If the cost of normalized nucleic acid per month is capped at 121.2 billion yuan, it is equivalent to a year will create a market size of 1.45 trillion yuan. Upstream reagent raw materials and testing equipment are still dominated by overseas giants such as Roche, Novartis, Abbott, Illumina, etc. Especially in terms of reagent materials, although the domestic camp has a science and technology innovation board-listed Novozymes, Fipon Bio, but the scale can not yet be compared with the international giants. Domestic nucleic acid testing companies are still mainly focused on midstream reagent production and downstream testing. This article mainly focuses on the downstream testing of listed companies. In the face of the above hundreds of billions of dollars in the market, many new nucleic acid testing enterprises rose rapidly. However, in May, Beijing in ten days there are three nucleic acid testing enterprises due to the nucleic acid testing process is suspected of illegal and criminal, the relevant personnel were taken criminal measures, such as gold quasi-medicine is revoked business license, the founder was arrested. According to incomplete statistics, from May to July, Liaoning, Qinghai, Anhui, Sichuan, Guangdong, Hunan, Shaanxi, Guizhou, Jilin, Tianjin, Inner Mongolia, Gansu, Beijing, Henan and many other places to carry out nucleic acid organizations to investigate. The results of the inspection showed that more than two hundred nucleic acid testing organizations were required to suspend their business or carry out rectification. Among them, some of them are third-party organizations under listed companies, and even many local CDCs and tertiary hospitals have also been identified as problems.Three, A-share listed companies list of nucleic acid testing
In screening the list made the following work: First, check the online media related articles; second is to check the listed companies of the regular report (mainly 2021 annual report and 2022 semi-annual report). In doing statistics I found that the network of some of the list of data statistics is very unreasonable, such as a company is a new crown vaccine companies, but also included it in the nucleic acid testing list; part of the company provided swabs or disinfectant water, but also said that it is a nucleic acid testing company; some are medical device companies are also included in the list of nucleic acid testing; some of them are indeed nucleic acid testing companies, but the volume is very low or even did not get the order, for us to Investment analysis is of little significance; some are not part of the testing industry itself, just take advantage of the market demand, temporary access to this market, the subsequent layout is not measurable. These types of classification I think from the investment point of view are "fake nucleic acid testing company", typical of the hot spot! Investors should pay attention to distinguish. So, the list is built on the basis of: First, the same X-shun ifind version of the new crown detection list of 104 shares; Second, according to the announcement of the listed company, eliminating no nucleic acid testing related description of the enterprise (listed companies themselves do not come up with say, there should be the future will not be much possibility of layout in this regard); Third, combined with part of the list of the network to verify one by one to determine that the announcement of the listed company said There is a relevant business before the inclusion of the list; Fourth, according to the size and positioning of their business, eliminating companies that have no reference value to us. In summary, with the exclusive compilation of A-share listed companies nucleic acid testing list (26). Note: The above operating income is the company's entire income, including the company's other business income.Four, data analysis and prediction
From the just released 2022 interim results, "nucleic acid track" is a standout. According to the above data, 26 A-share listed companies involved in nucleic acid testing in the first half of the total revenue of 111.3 billion yuan, total net profit of about 46.9 billion yuan, the profit margin of about 30% or more. And during the same period, more than 4,800 A-share listed companies, only less than 400 companies can reach such a level, awesome or not? Since the outbreak of the new crown epidemic in 2020, stepped in the new crown nucleic acid testing wind mouth of the company's ability to absorb money highlights, attracting many companies scrambling to layout, but now earn money whether it can be timely to get, whether the subsequent trend is sustained, the need for investors to think carefully. 1, the revenue is concentrated in the first few companies In the 2021 results that have been disclosed, there are new crown testing business (104) brought a total of 376.5 billion in revenue (some data statistics by the new crown testing business is roughly 100 billion yuan of revenue), contributing to 66.3 billion in net profit (including the performance of other business segments). But this business is now an oligopoly, running at the forefront of the ten companies market share of nearly 60%. Policies related to the normalization of epidemic prevention and control, so that the nucleic acid testing market ushered in greater upside. From this year's interim data, the 26 listed companies operating income of 111.3 billion yuan, net profit of 46.9 billion yuan. The top ten companies operating income of 80.532 billion yuan, accounting for 72% of the 26 companies, the core part highlighted. Unlike the layout of the above domestic "nucleic acid" test companies, nine Ann medical in the nucleic acid test plate a standout, with 23.2 billion in revenue (up 3989.07% over the same period last year) and 15.2 billion in net profit (up 3989.07% over the same period last year) to kill a number of peers, nine Ann medical The main business is the new crown "antigen" test, and foreign sales accounted for 98.48% of its total revenue, mainly from overseas subsidiary iHealth in the United States antigen reagent product sales. During the peak period of the new epidemic in the US from December 2021 to March 2022, there was a shortage of test reagents for quite a long period of time, as the local US manufacturers were not able to ramp up their production as fast as expected. iHealth's Xinguan antigen test kits were authorized by the US FDA EUA in November 2021 and began to be sold. According to the disclosed U.S. government purchase orders, the company obtained about 70% of the first 500 million human kit purchase contract, becoming an important support for the U.S. epidemic prevention work. The kit program shipped more kits than ever before, with daily shipments peaking at 30 million. iHealth's product line generated revenue of RMB23.052 billion in the first half of 2022, accounting for 99.08% of the company's overall revenue. What will be the performance situation in the second half of the year? According to the tone of Europe and the United States, or a conservative view, we will see. Daan Gene is one of the few companies involved in upstream equipment, midstream reagents and downstream testing. Benefit from the layout of the upstream and downstream through the nucleic acid testing, Daan genes in the first half of the year is comparable to a money printing machine, its revenue reached 6.676 billion yuan, the net profit of 3.608 billion yuan, the net profit margin is unattainable. Daan Gene's new coronavirus (2019-nCoV) nucleic acid detection kit (fluorescent PCR method) is one of the earliest batch of seven products to enter the fast-track approval channel of the State Drug Administration. According to the April 2022 report on the results of the first national inter-laboratory quality assessment of the new coronavirus nucleic acid rapid test in 2022 issued by the National Center for Prophylactic Testing, the percentage of laboratories using Daan Gene's new coronavirus nucleic acid test reagent was 62.9%, ranking first. According to the July 2022 Report on Inter-Room Quality Evaluation/Proficiency Testing Results of Novel Coronavirus Nucleic Acid Testing (Receiving Centralized Isolated Point Sample Testing Organizations), the percentage of laboratories using Daan Gene's new coronavirus nucleic acid testing reagents was 23.9%, still ranking first in the industry. Dean Diagnostics represents the status quo of the offline sampling and testing organizations, the first half of the testing and diagnostic business revenue of 10.753 billion yuan, an increase of 85.68% year-on-year, net profit of 2.184 billion yuan. , Inner Mongolia, Heilongjiang, Henan, Shanghai, Beijing and other 30 provinces of nucleic acid testing heavy responsibility. In the report period realized 10.75 billion yuan of total operating income, the new crown nucleic acid testing revenue of 4.75 billion yuan, accounting for 44.2%. 2, high accounts receivable, performance quality to be observed. From the early perspective, the nucleic acid testing industry is really good, but with the development of time, most of the industry ecological and social environment will change. From the first half of this year's financial results, the new crown nucleic acid testing business profiteering is still in, but the quality of performance is worrying, many companies have high accounts receivable, almost equal to the first half of the total revenue. From the figures, the enterprise's revenue and net profit have indeed increased significantly, but everyone's accounts receivable are very high, cash flow is tight, which makes the quality of performance greatly compromised. Because, at present, most of the new crown nucleic acid testing costs mainly from the government's financial resources input. According to investor inquiries on the company, most companies have replied by the impact of the new crown epidemic, the company's account period will be extended, because in recent years, our country's overall socio-economic development decelerated, the financial funds in the prevention and control of the new crown epidemic invested a huge amount of money in the settlement of nucleic acid testing costs in some areas of probability of the existence of the postponement of the understanding also expressed helplessness. As the epidemic continues, it is likely to further exacerbate the risk of bad debts that may be brought by some private medical institutions, which in turn may lead to a possible decline in annual performance. In addition, as the precision of the epidemic control and test price competitive downward, the new crown test scale and profitability is likely to have been or will soon reach its peak. 3, the industry profits gradually decline The early stage of the epidemic, nucleic acid detection capabilities of fewer companies, so as long as you have the capacity, there is a market, and the profits of the product in the early stage is also high. With the development of the epidemic, there are dozens of domestic companies have the ability to produce nucleic acid testing products, we compete with each other, resulting in the sales price has fallen to the cost of the price range, profits are minimal. The new coronary nucleic acid test cost cliff drop also makes the industry profit further compression. May 2, Beijing Municipal Bureau of Medical Insurance issued "on further reducing the price of the new coronary virus nucleic acid test project notice", will be a single sample of nucleic acid test price by the original per person copy of 24.9 yuan to 19.7 yuan, a reduction of more than 20%. At the same time, the price of the mixed test was reduced from RMB 5.9 to RMB 3.4, a reduction of 42%.On August 22, Yunnan Province's centralized drug purchasing platform showed that the price of the four winning new coronavirus nucleic acid test kits of Shengxiang Biologicals was reduced to as low as RMB 3.6 per person's portion. And at the beginning of 2020, the nucleic acid test was initially priced at 200 yuan/personal copy. The era of lying to make money has passed, and for the layout of the industry has not yet formed the scale effect of the enterprise, the future of the road there are many unknowns. Standing test demand for a number of listed companies bright performance, the market game is always also synchronized. Whether for the people or bear the expenditure of government departments, testing is only due to the epidemic repeatedly triggered by the passive demand, this demand is unlikely, we do not want to be a long-term demand, from a technical point of view, will not support the possibility of this long-term. 4, the market is still there, look at their own creation. Although the level of profitability can not be compared with the upstream, but the ICL track competition pattern is gradually solidified and upgraded. According to institutional research, the domestic independent third-party medical testing market has formed a "4 + X" pattern, the Golden Area Medical, Dean Diagnostics, Adicon (Hong Kong) and Daan Genetics four companies combined market share of more than 70% (JiuAn medical market is mainly in foreign countries). More critically, the sampling and testing segment has not been included in the collection and procurement. Changes in the nucleic acid testing wind mouth, in different stages to create each different wealth creation myth. The development of any industry should follow the laws and rhythm of social development, short-term profiteering in the temporary mismatch between supply and demand is reasonable, but the long-term will inevitably usher in the backlash. For the nucleic acid testing industry is even more so, once the policy has been adjusted, may be the whole industry to face a directional shift.