As a result, the 2023 performance of BGI (300676.SZ) experienced a sharp decline.

On the evening of February 29, the performance forecast announced by BGI showed that current revenue and net profit to mother were 4.353 billion yuan and 901 million yuan respectively, down 38.29% and 88.64% year-on-year respectively.

Regarding the reason for the decline in performance, BGI stated that “due to the industry cycle, the company's related testing business revenue has declined significantly.”

The testing business mentioned by BGI may point to testing services related to epidemic prevention.

In fact, the downturn has long been evident. In the first half of 2023, revenue from BGI's two businesses, basic research and clinical application services for infection prevention and control related to epidemic prevention, and comprehensive precision medicine testing solutions declined by 75.22% and 48.18%, respectively.

BGI is not an exception to the sharp decline in industry performance.

In 2023, Jiu'an Healthcare (002432.SZ), which also received abnormal performance growth from the COVID-19 testing business, was also mired in a quagmire of sharp decline in performance. Net profit to the mother is expected to be 1.1 billion yuan to 1.3 billion yuan during the same period, down 91.89% to 93.14% from the previous year.

“In the same period last year, the company's iHealth in vitro diagnostic testing products sold well in the US market. The sharp increase in product sales revenue led to a significant increase in the company's performance during the same period last year.” Jiu'an Medical pointed out, “The company's performance during the reporting period declined compared to the same period last year, mainly due to the decline in demand for related products in the US market after normalization.”

IVD company Shengxiang Biotech (688289.SH), which also disclosed its performance forecast on the evening of February 29, had 2023 revenue and net profit of 1.06 billion yuan and 360 million yuan respectively, down 84.40% and 81.40% year-on-year respectively.

“This is due to changes in public health prevention and control policies at home and abroad, which has led to a sharp drop in demand for COVID-19 nucleic acid detection reagents and instruments, and a decline in related business revenue.” Shengxiang Biology said.

According to BGI, there was a certain increase in revenue from the reproductive health business and the two businesses of multiomics and cancer prevention and control in 2023.

“During the reporting period, the company continued to proactively and strategically adjust the product structure and supply chain strategy of its main business to promote the steady development of its main business. Among them, revenue from the reproductive health business and the multiomics business increased slightly year-on-year, and revenue from cancer prevention and control achieved significant year-on-year growth.” BGI said.

However, judging from the sharp decline in profits, these two businesses may still not be able to make up for the lost revenue from the testing business.

Where is the next growth point is probably already a common problem in the industry.