Securities Times reporter Chen Lixiang

  After the price of nucleic acid testing for the new coronavirus has been adjusted nationally for many times, the government procurement price per person has been as low as about 3 yuan, which also includes virus detection reagents, extraction reagents, sampling tubes and other materials.

Although nucleic acid testing is still an important means of epidemic prevention and control, behind this seemingly prosperous industry, the gross profit of the industry has continued to bottom out, and some companies have even hovered near the break-even line.

  "3.2 yuan per person, this price really surprised me. We expected to continue to reduce the price, but we didn't expect to drop so much at one time." Wang Hua (pseudonym), an executive of a medium-sized testing reagent company, told the Securities Times reporter. At present, the company's reagent supply is mainly based on mixed inspection. The current national guide price is about 8 yuan per person, and there is still profit to speak of, but if it falls below 5 yuan, the company must consider further reducing costs, but There is actually not much space to compress.

National price reduction

  When the nucleic acid test was first released in 2020, the price was 200 yuan per person. After that, as more qualified companies obtained qualifications and production capacity continued to increase, the National Medical Insurance Bureau issued several national price adjustment notices. The price per person for a single test is from 180 yuan, 80 yuan, and 60 yuan all the way down to the current 28 yuan, and the government-guided price for multi-person mixed inspections has been lowered to no more than 8 yuan per person.

There are even some areas where prices are lower than the national guide price.

  Starting from May 6, Hebei adjusted the maximum price of single-person apheresis for new coronavirus nucleic acid testing to 19.7 yuan per person, and the maximum price of mixed testing to 3.4 yuan per person.

The price of the project is the highest government-guided price, and it cannot go up or down.

The guide price is currently the lowest in the country.

  The pricing in Hebei refers to Beijing.

On May 2, the Beijing Municipal Medical Insurance Bureau issued the "Notice on Further Reducing the Price of New Coronavirus Nucleic Acid Testing Items", reducing the price of single-sample nucleic acid testing from 24.9 yuan per person to 19.7 yuan, a drop of more than 20%.

At the same time, the price of hybrid testing dropped from 5.9 yuan to 3.4 yuan, a drop of 42%.

  At the same time, the Beijing Municipal Medical Insurance Bureau also issued a linkage notice on the price limit of new coronavirus nucleic acid detection reagents and supporting consumables. The maximum guide price is 6.7 yuan per person, and it is required that the quotation of enterprises should not be higher than the maximum guide price limit and the provincial centralized procurement price.

Among them, the maximum guide price limit for detection reagents is 4.3 yuan/person, and the maximum guide price limit for extraction reagents and sampling tube products is 1.6 yuan/person and 1.0 yuan/person, respectively.

  In addition, several provinces have recently issued notices of nucleic acid testing price reductions.

According to statistics from the National Medical Insurance Bureau, in early April, 30 provinces across the country had issued documents to lower the government-guided prices.

  At present, the price of a single inspection in Hainan and Shanghai has dropped to 25 yuan per person.

In terms of multi-person mixed inspections, Shandong, Anhui, Inner Mongolia, Guangdong and other five provinces have lowered the price to 6 yuan per person, while Shanghai requires no more than 5 yuan per person.

Gross profit bottoming out

  Wang Hua told reporters that the production technology of nucleic acid detection reagents is actually not very demanding, but there are certain requirements for manpower and production environment, and it is necessary to obtain relevant qualifications for production.

At present, the cost of testing reagents in various enterprises in the industry is not the same. The low cost can be as low as 3 yuan per person or slightly lower, but it is generally around 4 to 5 yuan.

The competition in the industry will become more and more fierce, and cost control is king. If prices continue to be reduced, it is not ruled out that some companies will directly choose to withdraw from the market.

  Based on the financial reports of several mainstream testing kit manufacturers such as Wanfu Bio and Orient Bio, analysts from Essence Securities roughly estimated that the current average production cost of each nucleic acid test kit is about 3-5 yuan, including materials, labor and manufacturing costs.

  This means that if the combined inspection price of the National Medical Insurance Bureau is calculated at 8 yuan/person, the gross profit rate of enterprises in the industry is still generally more than 37%. If the single inspection guide price is 28 yuan/person, the gross profit rate will be higher. high.

However, if calculated according to the mixed inspection guide price of 3.4 yuan per person in Beijing and Hebei, the gross profit of the company is basically compressed to a small space, and it is even lower than the cost price of some companies.

  At present, the government procurement price in most provinces is still priced according to the guidance price of the National Medical Insurance Bureau, but according to the centralized procurement linkage price adjustment rules, it is a general trend to drop to around 3 yuan nationwide.

The price adjustments in Beijing and Hebei refer to the results of the Guangdong Alliance’s centralized procurement at the end of April.

  On April 29, the Guangdong Provincial Drug Trading Center announced the results of the centralized procurement of new crown detection reagents and related consumables. The winning price of the first type of ordinary nucleic acid reagents and sets was as low as 3.2 yuan per person. Beijing Zhuocheng Huisheng Supplied by Biotechnology Co., Ltd. and Fosun Diagnostic Technology (Shanghai) Co., Ltd.

The winning bids of Mingde Bio, Daan Gene, and Shengxiang Bio were all between 4 and 6 yuan.

  Wang Jun (pseudonym), a senior researcher in the pharmaceutical industry, told reporters that the new crown nucleic acid detection kits are mainly purchased from the government, and the price is exchanged for quantity through centralized procurement. The purpose is not to make companies lose money, but to reduce the cost of middlemen.

At present, the domestic supply is sufficient, and in this context, the company's gross profit margin may be controlled at around 20%.

Because the amount of centralized procurement is relatively large, ordinary companies will choose to continue to supply even if their profits are compressed, but the investment will inevitably decrease accordingly.

performance has been affected

  In the past two years, new crown nucleic acid detection manufacturers have made a lot of money, but with the reduction of reagent prices and changes in market supply and demand, and the competitive landscape, the industry has entered a state of small profits but quick turnover.

Although the performance of many companies in the sector exceeded expectations in 2021, the industry trend has gradually become clear.

  After the outbreak of the novel coronavirus pneumonia in Wuhan in early 2020, the country quickly approved the launch of nucleic acid detection reagents from 6 companies, namely Zhijiang Bio, Shengxiang Bio, Jienuo Bio, Berger Medical, Daan Gene and Huada Group. .

The performance of these "crab eaters" in the past two years has exploded, but most of last year's performance will be affected by the price reduction of new crown nucleic acid detection kits.

  Taking BGI as an example, BGI's nucleic acid testing business includes the production and sales of kits and testing services.

The explosive growth of this business has reversed the decline in performance for BGI for two consecutive years, and its net profit in 2020 has directly increased by more than 6 times.

However, in 2021 and the first quarter of this year, its performance will no longer continue to grow rapidly, and its net profit will drop by 29.7% and 37.63% respectively.

  BGI stated at the performance briefing that in 2021, due to the decline in the unit price of new crown nucleic acid reagents and detection worldwide, as well as changes in epidemic prevention strategies in some countries and regions, the company will take the initiative to strategically adjust the structure of new crown-related products, based on new crown-related business revenue and This is down from a higher base in the same period in 2020.

  Shengxiang Bio's operating income and net profit in 2021 will both decline, and the gross profit margin will also decline by 8.36 percentage points.

The main reason is that it is affected by factors such as the centralized procurement price of domestic new crown detection reagents and the general downward price of new crown related products of similar manufacturers in the global market.

  Zhijiang Bio’s net profit in 2021 and the first quarter of this year will decline, and nucleic acid detection reagents account for more than half of its revenue.

In 2021, the gross profit margin of this business will drop by 13.85 percentage points compared with 2020. The main reason is that the market supply of new crown detection products is sufficient and the industry competition is fierce. In addition, many places across the country have implemented price reductions for new crown detection kits. The box is slashed in price.

  However, although the revenue of the new crown nucleic acid detection products of the above-mentioned companies has declined, the overall gross profit margin is still considerable.

According to Wind statistics, the median gross profit margin of 35 new crown nucleic acid detection reagent-related companies (including upstream and downstream companies) in 2021 is 61%.

If Wang Jun's industry average gross profit margin drops to 20%, there is still a lot of room for price reduction as a whole.

In particular, the performance of companies with a high proportion of new crown nucleic acid detection reagent revenue may be further under pressure.

walking on two legs

  Obviously, the era of "laying and earning" in the nucleic acid testing industry is gone forever.

In the post-epidemic era, the source of incremental performance of in vitro diagnostic manufacturers is also a concern for investors.

  Judging from the current layout of enterprises, there are mainly two development paths for enterprises in the industry. One is to continue to deepen the development of the new crown detection industry and strive to expand the production of antigen detection kits; the other is to return to the main business and accelerate the layout of normalized business.

  Wang Hua told reporters that the production requirements and cost of antigen detection kits are actually lower than nucleic acid detection. In the future, with the normalization of domestic antigen detection, this business will also be a "sweet pastry", and his company is also Accelerate the application for relevant qualifications.

  On May 6, at the press conference on the prevention and control of the new crown pneumonia epidemic in Beijing, Tian Wei, director of the External Information Office of the Publicity Department of the Municipal Party Committee, introduced that regional nucleic acid screening should be promoted in an orderly manner, and the layout of sampling points should be further optimized to meet the normalcy of citizens. chemical testing requirements.

Carry out antigen testing for key groups of people, key industries and key regions to strengthen personal protection.

  Home-based testing for COVID-19 antigens has been popularized in this round of outbreaks spread across the country, such as in Shanghai, Jilin and other places.

As an important supplementary method for nucleic acid detection, the market space for antigen detection may reach hundreds of billions of yuan.

The first-quarter results of related companies such as Mingde Bio, Wanfu Bio, and Oriental Bio have begun to reflect their power.

  The latest results of the Guangdong Provincial Alliance’s centralized collection show that a total of 15 companies won the bids for COVID-19 antigen detection reagent manufacturers, including self-testing products. The winning bids were generally around 4 yuan per person, and the lowest price was 3.91 yuan per person.

  Compared with nucleic acid testing, the cost of antigen testing is relatively low.

It is predicted that the production cost of new crown antigen detection kits by domestic leading enterprises is about 2 yuan per person.

This means that the profit margin of the enterprises that won the bid for Guangdong Alliance's centralized procurement is nearly doubled.

  However, the COVID-19 antigen detection kit market is also faced with the problems of price reduction in centralized procurement and full competition among industry enterprises.

According to the statistics of Caixin Securities analysts, the current domestic antigen detection reagent production capacity is sufficient, and 31 companies have been approved for new crown antigen self-test products.

In the future, as more companies join in, the possibility that the price of centralized procurement will continue to decline cannot be ruled out.

  In addition to deploying antigen testing, returning to the main business is also the choice of some companies in the industry.

  Incremental revenue from COVID-19 nucleic acid testing kits and testing services has brought strong impetus to BGI's performance growth.

But despite this, BGI did not immerse itself in the new crown-related business to expand production, but took the initiative to adjust the structure and focus on the development of the main business.

  Daan Gene, which relies on the emergence of new crown products, has attracted wide attention in the direction of its layout in the post-epidemic era.

The company said on the interactive platform that it will continue to focus on its main business in the future, focusing on clinical diagnostic technologies and products.

In addition, based on the market and technology accumulated in the research and development of new crown-related products, it is possible to accelerate the in vitro diagnosis business to become an important direction and opportunity for the cross-border layout of enterprises, and even become one of the main businesses.

  Yirui Bio has always emphasized that the performance growth brought by the new crown detection related products is uncertain and unsustainable, and has made risk warnings in its annual report.

The company said on the interactive platform that it will deepen its food safety rapid testing business in the future, consolidate and expand the company's leading edge and market share in this field; the in vitro diagnostic business is not limited to new crown testing. As an important direction for the company's future development, the company will continue to Strengthen the layout of in vitro diagnostic business.