The normalization of nucleic acid detection under the epidemic situation is under way. At present, China has the conditions to provide large-scale and continuous nucleic acid detection. According to the data of the joint prevention and control mechanism of the State Council, as of February 19, 2022, 12277 medical and health institutions in China could carry out the detection of new coronavirus nucleic acid.

In this context, the demand for nucleic acid testing has increased greatly, the demand for relevant instruments, equipment, testing reagents and supporting consumables has doubled, and the industry and related concept stocks have continued to benefit.

Source: interface news research department

Specifically, Dongfang biological (688298. SH), Mingde biological (002932. SZ) and other companies are the first domestic manufacturers approved for Xinguan nucleic acid detection reagent, with leading market share; At the same time, in response to the needs of overseas markets, we have developed new coronavirus antigen and antibody detection kits to further boost our performance.

In 2020, the new crown nucleic acid detection reagent developed by Oriental biology won domestic nmpa and EU CE certificates one after another. Since 2021, the new coronavirus antigen detection reagent has been approved at home and abroad. In terms of performance, the income of Dongfang biology in 2021 was 10.169 billion yuan, a significant increase of 211.43% year-on-year; The net profit attributable to the parent company was 4.92 billion yuan, a significant increase of 193.33% year-on-year. Since 2022, the detection demand brought by the epidemic has further boosted the company’s performance. In the first quarter of this year, the revenue of Oriental biology was 4.746 billion yuan, a year-on-year increase of 112%; The net profit was 2.067 billion yuan, a year-on-year increase of 74%.

Mingde biological growth model is similar. In February 2020, the company successfully developed the new crown nucleic acid detection reagent. According to the disclosure, at present, Mingde biology has a market share of 14.8% in the domestic Xinguan nucleic acid detection reagent, ranking third; In 2021, the company developed a new coronavirus antigen self-test kit and successively obtained EU CE certification. In 2021, the income of Mingde biology was 2.83 billion yuan, with a year-on-year increase of 195.05%; The net profit attributable to the parent company was 1.413 billion yuan, a year-on-year increase of 201.37%. In the first quarter of 2022, the revenue of Mingde biology was 2.487 billion yuan, a year-on-year increase of 267%; The net profit was 1.389 billion yuan, a year-on-year increase of 307%.

Shuoshi Biology (688399. SH) also achieved rapid growth by stepping on the development rhythm of nucleic acid detection kit. The novel coronavirus detection kit and antigen detection kit developed by the company have been successively licensed by EU CE and other regulatory authorities. In 2021, the company’s revenue grew by 63.19%. High growth continued in the first quarter of 2022, with a revenue of 1.522 billion yuan, a year-on-year increase of 77%; The net profit was 631 million yuan, a year-on-year increase of 62%.

With the substantial improvement of the performance of companies related to nucleic acid testing products, the demand for nucleic acid testing services has also increased, and concept stocks such as Dean diagnostics (300244. SZ) and Kemp Biology (300639. SZ) have benefited.

Dean diagnostics has established a three-level linkage network of “provincial central laboratory + municipal regional laboratory + cooperative joint construction laboratory”, which has successively arranged regional markets around Beijing, Hangzhou and Guangzhou. According to the disclosure, the company has an independent medical laboratory with leading scale and technology in China, which can carry out 2800 testing projects and provide services to more than 20000 medical institutions.

In addition, the three reagents of new crown nucleic acid, antibody and antigen also contributed to the income. In 2021, Dean’s diagnostic revenue was 13.083 billion yuan, a year-on-year increase of 22.85%, of which the diagnostic service revenue was 6.62 billion yuan, a year-on-year increase of 30.25%; The annual net profit attributable to the parent company was 1.163 billion yuan, a year-on-year increase of 44.83%. The company’s performance in the first quarter of 2022 also increased significantly.

Kemp biology provides medical testing services by building a large number of third-party medical testing laboratories. Third party medical laboratory, also known as independent medical laboratory (ICL), is a medical institution that is independent of medical institutions and engaged in medical examination or pathological diagnosis services under the permission of the health administrative department.

According to the disclosure, the third-party Medical Laboratory of Kaipu biology has undertaken the large-scale new crown screening business in Yunnan, Liaoning, Guangdong, Hong Kong, Shanghai and other places in 2021. By the end of 2021, 30 laboratories of Kemp biology had obtained the practice license of medical institutions and put into operation. In 2021, the company’s revenue was 2.673 billion yuan, with a growth rate of 97.34%, of which the revenue of the third-party medical laboratory was 1.643 billion yuan, a significant increase of 197.54% year-on-year.

IVD enterprise Antu Biology (063658. SH) also temporarily entered the field of nucleic acid detection services. In August 2021, as a local enterprise, Antu biology launched the “reverse” nucleic acid detection mobile P2 + laboratory to help fight the epidemic in Henan Province. Antu biology did not pay enough attention to the molecular diagnosis field where Xinguan nucleic acid detection is located. Strategically, the company is more optimistic about immune diagnostic reagents with higher technical threshold. In 2021, the growth rate of Antu biological income was 26.45%.

It should be noted that with the implementation of centralized procurement of new crown testing products in more regions in China and the increase of market supply, the sales price of products of existing companies has decreased, thus compressing the profit space. Among the eight nucleic acid detection related enterprises counted by interface news, the revenue of Mike Biology (300463. SZ) fell. In fact, the company’s revenue from Xinguan testing products in 2021 was 716 million yuan, an increase of only 0.93%, and the gross profit margin also decreased by 4.63%. Mike Bio said that the company’s new crown nucleic acid detection products are mainly distributed, while centralized procurement and market competition lead to a downward trend in product prices.

Huada gene (300676. SZ), which is mainly engaged in gene sequencing services, also faces similar problems, and its performance also faces a high base in the same period. At the beginning of the epidemic in 2020, BGI launched a series of products such as the novel coronavirus detection kit. In order to solve the problem of insufficient detection flux of novel coronavirus, BGI has launched an integrated “fire eye” laboratory solution, which is now operating in Hong Kong and Amman airports. However, in the process of normalized anti epidemic since 2021, the products subsequently developed by BGI, such as coronavirus antigen detection reagent, have not achieved obvious advantages in the international and domestic markets. The high base in 2020 has increased the pressure on the performance of BGI. twenty