Wen | Kingfisher Capital
Gene testing agency Heplos Biotechnology Co., Ltd. (hereinafter referred to as Heplos) is seeking IPO in Hong Kong.
From 2020 to 2022, the revenue of Haplois will be 100 million yuan, 487 million yuan and 1.676 billion yuan respectively, and the net profit of the same period will be - 66 million yuan, 67 million yuan and 158 million yuan.
The "weapon" of Haplois to turn losses into profits is nucleic acid testing services. It is precisely because the company joined the ranks of nucleic acid testing that the net profit finally climbed, passing the 100 million yuan mark.
Because of the continuous decline in gross profit margin and the rapid decline in demand for nucleic acid testing in the post epidemic era, there is a possibility that this business will turn the company around.
Benefiting from nucleic acid business
In 2020, Heplos will have a net loss of 66 million yuan.
However, in the following two years, the company's performance improved significantly. In 2021 and 2022, the company recorded a net profit of 66.8 million yuan and 158 million yuan respectively, which was mainly attributable to the revenue from Xinguan testing services.
As shown in the figure below, this is the benefit analysis of Haplois gene detection solution. In 2021 and 2022, the "pathogenic microorganism gene detection solution", that is, the new crown accounting detection service, will account for the highest proportion of benefits. In the three fiscal years 2020-2022, the company's revenue from pathogenic microorganism gene detection solutions was 34 million yuan, 359 million yuan and 1.534 billion yuan respectively.
In 2022, the income from nucleic acid testing will account for more than 90% of the total income.
Behind the "turning over"
It is worth noting that behind the above performance of Haplois, the gross margin of the key indicator of nucleic acid detection business has continued to decline, and the range is not small.
In 2020, the gross profit rate of nucleic acid detection will reach 60.4%, which is comparable to the gross profit rate of full cycle gene detection solutions. By 2021, the gross profit rate of nucleic acid testing will be reduced to 47.7%, and by the end of 2022, it will again be reduced to 32.8%.
In other words, although Haplois has joined the "nucleic acid army", the nucleic acid business is also known as the "drag bottle" of the company's profitability.
Heplos explained that the implementation of COVID-19 price control policy reduced the profit margin of testing services, and the increase in the number of superimposed tests led to the decrease of the gross profit margin of the business line of pathogenic microorganism gene detection solutions.
Therefore, it is not difficult to imagine that, as the most profitable business of the company, with the continuous decline of the gross profit rate of nucleic acid business and the reduction of the demand for nucleic acid detection in the post epidemic era, the company's performance in 2023 and thereafter needs to be put in a big question mark.
Uncollected money
It is worth noting that Haplois has failed to recover part of its funds after participating in nucleic acid testing, which is marked as "trade receivables" in the financial statements.
Look at a set of data.
Trade receivables by the end of 2020 will reach 20.9 million yuan, increase to 246 million yuan by the end of 2021, and expand to 718 million yuan by the end of 2022.
Heplos explained that the above increase was mainly due to the rapid expansion of business scale, especially those related to the provision of COVID-19 testing services for government departments.
According to the prospectus, in 2020, 2021 and 2022, Haplois recorded a financial asset impairment loss of 6000 yuan, 1.7 million yuan and 38 million yuan respectively, and indicated that this was a trade receivables impairment loss.
In this regard, Heplos also revealed that the accounting and testing service project is to cooperate with government agencies. The credit period of this service is longer, and several government agents are allowed to have longer credit periods to seek long-term cooperation.
It is reported that the credit period of the trade terms and settlement arrangements between Heplos and customers before generally does not exceed 3 months. For example, the average turnover days of trade receivables in 2020 will be 51 days, which will be extended to 100 days and 101 days in 2021 and 2022 respectively.
In the prospectus, Heplos reminded investors that "we are facing credit risks arising from trade receivables. If we fail to collect trade receivables in time, or even cannot collect trade receivables at all, it may have a significant adverse impact on our cash flow and operations."
Too many administrative punishments
Tianyan search showed that the medical laboratory of Heplos involved many cases of administrative punishment.
For example, in September 2022, the Shenzhen Municipal Health Commission found that the staff in the laboratory sample preparation area did not obtain the training certificate of clinical gene amplification test technology when they extracted the nucleic acid of COVID-19. In the end, Heplos was fined 20000 yuan.
For another example, the law enforcement personnel of Shenzhen Municipal Health Commission found that two laboratory staff of the company did not obtain the qualification certificate of clinical gene amplification test technology training, and they did the work of adding new coronavirus nucleic acid detection samples from the biological safety cabinet in the laboratory's new coronavirus sample preparation area (Area II).
In the post epidemic era, as a nucleic acid detection agency, how will Haplois survive? This may also be a microcosm of this era.
(Statement: This article only represents the author's view, not Sina.com's position.)
