Introduction to this report:
Shuoshi Biology is an integrated enterprise focusing on molecular diagnosis, "instrument+reagent+service". In recent years, its revenue and net profit have continued to grow.
Summary:
Main business of the company: Founded in 2010, the company is one of the leading providers of in vitro diagnostic products in China, focusing on the R&D, production and sales of in vitro diagnostic products such as in vitro diagnostic reagents and supporting testing instruments, and expanding to the field of in vitro testing services, to achieve an integrated business model of "instruments+reagents+services". The company is the first to advocate multiple fluorescent quantitative PCR detection in China, and is in a leading position in the field of molecular diagnosis technology; Advanced instruments such as vaginitis automatic detection workstation have realized the intellectualization, standardization and standardization of female reproductive tract micro ecological detection. At present, it has developed nearly 500 products covering infectious disease monitoring, tumor screening, female reproductive tract micro ecological monitoring and other fields, which are widely used in infectious disease prevention and control, clinical monitoring, large-scale population screening, eugenics management and other fields. The company realized its revenue by selling reagents, instruments and providing relevant testing services. Among them, the sales of reagents are the main source of revenue. The proportion of reagent revenue in the main business revenue in the past three years is about 95%, mainly including nucleic acid molecular diagnostic reagents, nucleic acid purification reagents and dry chemical diagnostic reagents, In recent three years, the revenue of nucleic acid molecular diagnostic reagents accounted for about 60% of the main operating revenue. The gross profit rate of reagents remained above 83%. Benefiting from the growth of sales revenue of HPV and respiratory pathogen detection series diagnostic reagents, the revenue and profit in the past three years have increased rapidly. In 2018, the operating revenue was 231 million yuan, up 23.18% year on year; The net profit attributable to the parent company was 64 million yuan, up 49.58% year on year; The net profit not attributable to the parent company was 56 million yuan, up 68.07% year on year.
Industry pattern and company competitive advantage: In recent years, the global IVD market has maintained a steady development trend. According to the data of Allied Market Research, the global in vitro diagnostic market size reached 60 billion US dollars in 2016, and is expected to reach 70 billion US dollars by 2020. The in vitro diagnostic reagent industry in China has entered the development period from the introduction period, and has shown a rapid development trend in recent years. According to the China Medical Device Industry Development Report (2017), the in vitro diagnostic market in China was 28.8 billion yuan in 2013 and 45 billion yuan in 2016, with an average annual compound growth rate of about 16%. It is estimated that by 2020, the market size of the diagnostic reagent industry in China will exceed 80 billion yuan. In particular, the molecular diagnosis market is in a rapid development period, with the growth rate of market scale maintaining between 20% - 25%, which is the fastest growing market among the main diagnostic reagents. The number of domestic reagent enterprises is large, the market concentration is low, and the product quality level gap is obvious, and they are mainly concentrated in the biochemical diagnosis and immune diagnosis markets. Major enterprises in the field of molecular diagnosis include Daan Gene, Eide Biology, Kepu Biology, Zhijiang Biology, etc. The company has certain technical product advantages: it first advocates multiple fluorescent quantitative PCR detection in China, and is in a leading position in the field of molecular diagnosis technology; The self-developed medical image analysis and diagnosis system has completed the automatic and intelligent transformation of vaginal detection. The integrated business model of "instrument+reagent+service" adapts to the development direction of precision medicine, improves customer service experience and satisfaction, becomes the core competitiveness of the company, and has initially established a nationwide marketing network.
Investment direction of raised investment projects: the number of shares to be publicly issued by the company this time is not more than 14.66 million shares (excluding the number of shares to be issued with the over allotment option), and the raised funds will be used for the construction of the company's Taizhou headquarters industrial park project after deducting the issuance expenses (the total investment is 403 million yuan).
Use of valuation methods and suggestions: The company meets the criteria for listing on the Science and Technology Innovation Board: the estimated market value is not less than 1 billion yuan, the net profit in the last two years is positive and the accumulated net profit is not less than 50 million yuan, or the estimated market value is not less than 1 billion yuan, the net profit in the last year is positive and the operating income is not less than 100 million yuan. The company has a relatively mature listed product line, and has a certain scale of income and profitability. It is recommended to use FCFF valuation method or PE valuation method for valuation.
Risk tip: new product R&D risk, market competition intensifies risk
