Industry News

CWBIO (688426.SH) released the announcement of the initial public offering of stocks on the Science and Technology Innovation Board, and the company's shares will be listed on the Shanghai Stock Exchange Science and Technology Innovation Board on October 25, 2022.

1.     CWBIO- Molecular Detection Upstream Core Enterprise

Based on the independent research and development of the underlying core technologies of molecular detection, CWBIO has more than ten years of R&D accumulation in the fields of enzyme raw materials, nucleic acid preservation, and sample pretreatment.

The company's core products include molecular detection enzyme raw materials, nucleic acid preservation reagents, nucleic acid extraction and purification reagents, and molecular diagnostic kits. The reagents developed by the company play an important role in the efficiency and accuracy of molecular detection. At the same time, based on the technical advantages of each core link of molecular detection, the company has expanded its business to the screening and diagnosis of gastrointestinal diseases and respiratory infectious diseases. It has developed a variety of innovative products and services in the field of molecular detection, realizing the integrated layout of "core enzyme raw materials + kits + testing services" for molecular detection.

2.     Benefiting from the epidemic, performance has exploded

Benefiting from the new crown epidemic, CWBIO has performed very well in recent years. According to the disclosure, from 2018 to 2021, the company's operating income was 55.8288 million yuan, 73.9385 million yuan, 233 million yuan and 338 million yuan, and the net profit was 6.5753 million yuan, 8.9716 million yuan, 108 million yuan and 126 million yuan respectively.

In 2020, the company's revenue and net profit both exceeded 100 million yuan, a substantial increase compared with previous years, of which net profit increased by more than 10 times. Between 2019 and 2021, the compound growth rate of revenue alone will increase by 113.95%. Among them, in 2020, the company's main business income increased by 159 million yuan compared with the previous year, an increase of 215.41%, mainly due to the substantial increase in the company's molecular detection products demand after the outbreak.

Among them, the revenue of the new coronavirus nucleic acid detection service business in 2020 and 2021 was 30.7418 million yuan and 59.3001 million yuan respectively, accounting for 13.18% and 17.52% of the current revenue, respectively. The gross profit margin of the new coronavirus nucleic acid detection service was 87.71% and 69.67%.

In the first half of 2022, CWBIO's operating income and net profit were 266 million yuan and 101 million yuan respectively, which still maintained a substantial growth trend compared with the same period of the previous year.

3.     Plans to raise 986 million for capacity expansion and marketing network, etc.

CWBIO's fundraising project is expected to use 986 million yuan of raised funds. According to the latest issuance and listing announcement, if the issuance is successful, the total amount of funds raised is expected to be 1.141 billion yuan. After deducting the issuance expenses, the net amount of funds raised is expected to be 1.054 billion yuan.

Among them, the total investment of the industrialization project of medical devices and biological detection reagents is 500 million yuan, and the project construction period is 24 months. After the completion of this project, the company's production capacity will reach a new level, and through the introduction of automated production equipment, production efficiency, quality stability, and economies of scale will be better achieved, thereby improving the company's market competitiveness.

The CWBIO marketing network construction project has a total investment of 117.0764 million yuan and a construction period of 36 months. It is planned to build 13 marketing centers in China and 6 overseas marketing centers.

The total investment in the research and development project of molecular detection products is 141.9076 million yuan, which is invested in 60 months. Using the existing research and development system, the focus is on: 1) screening and diagnosis of diseases of the digestive tract; 2) rapid nucleic acid detection of pathogens in the respiratory system, to carry out research and development work in these two fields.

4.     Summary and Analysis

From the perspective of the industrial chain, CWBIO belongs to the upstream link of life sciences, and the main downstream customers are the midstream manufacturing links of IVD. Its performance is closely related to the epidemic. Therefore, it also has strong explosiveness and volatility, the focus of future performance is also to use the opportunity of listing to continuously expand market share, especially by adding new product pipelines such as Helicobacter pylori detection and colorectal cancer screening technology, thereby stabilizing performance growth expectations.

At the same time, we also briefly talk about our views on the upstream of life sciences. Because the current round of the epidemic and the supply chain are independently controllable, the upstream of life sciences has always been highly concerned by investors in the primary and secondary markets, but this field has the characteristics of low single product ceiling and large number of SKUs. Therefore, to truly grow into a platform-based company in the future must be achieved through independent research and development + external expansion. Listing is only a new starting point for the development of these companies, and we need to continue to pay attention and track them in the future.