Zhang Wei, Investor Network

In the post-epidemic era, how many successful companies that have relied on COVID-19 to improve their performance can be seen from the latest quarterly report.

Hangzhou Aotai Biotechnology Co., Ltd. (hereinafter referred to as "Aotai Biology", 688606.SH), a manufacturer of in vitro diagnostic reagents, released its quarterly report on April 29th, showing that its revenue in the first quarter of this year (Q1) fell 88.75% from a year earlier, and its net profit fell 96.14% from a year earlier, in sharp contrast to 2022 revenue and net profit growth of 80.88% and 54.69%, respectively.

On the secondary market, Aotai's share price fell below its offering price less than a month after its listing. As of May 9, Aotai Bio closed at 93.93 yuan per share, still in a "broken" state, down nearly 60% from its all-time high. Performance, share prices have plummeted, and products rely on export Aotai biological how much competitiveness?

The rapid growth of performance came to an abrupt end.

According to the prospectus, Aotai Biology is mainly engaged in the research, development, production and sales of in vitro diagnostic reagents, and its main products are instant diagnostic reagents (POCT). According to the annual report, POCT's sales revenue in 2022 was 3.387 billion yuan, accounting for 99.96% of its main income; in the same period, other income was less than 1.5 million yuan, accounting for only 0.04% of revenue.

The forward-looking Industrial Research Institute pointed out that affected by the COVID-19 epidemic, the global demand for POCT has risen sharply, directly driving the performance of POCT companies such as Aotai Biology.

Financial data show that Aotai Bio's main income from 2020 to 2022 was 1.136 billion yuan, 1.873 billion yuan and 3.389 billion yuan respectively, and its net profit was 679 million yuan, 777 million yuan and 1.184 billion yuan respectively, with a compound annual growth rate of more than 60%. Net profit also maintained rapid growth.

It is worth noting that Aotai Biology's products are mainly sold abroad. From 2020 to 2022, export income accounted for 99.88%, 99.01% and 79.19% of Aotai's main business income, respectively. Aotai Bio said that export revenue is still the main source of revenue for the company, and the company has the competitive advantage of participating in the international market, which will help to expand in the domestic market in the future.

However, with the end of the COVID-19 epidemic, the rapid growth of Aotai's biological performance also came to an abrupt end.

According to the quarterly report released on April 28th, Aotai Biological Q1's revenue was 236 million yuan, down 88.75% from last year's Q1's 2.099 billion yuan, and its net profit was 41 million yuan, down 96.14% from last year's Q1's 1.049 billion yuan.

In fact, Aotai's revenue and net profit have been declining since the first quarter of 2022.

Aotai biological net profit continues to decline (single quarter)

Financial data show that last year, Aotai's Q1 revenue was 2.099 billion yuan, Q2 dropped to 625 million yuan, Q3 was 287 million yuan, and Q4 was 379 million yuan. At the same time, last year, the net profit of Q1 was 1.049 billion yuan, Q2 dropped to 264 million yuan, Q3 only 58 million yuan, and Q4 even lost 176 million yuan. Judging from the single-quarter data, Aotai's weak performance in the first quarter of this year is only a continuation of last year.

The overall performance of POCT industry is not good.

From an industry point of view, not only Aotai Biology, but also most POCT companies after the COVID-19 epidemic are declining.

According to Wind data, as of the end of April 2023, there were 37 listed companies in the A-share POCT industry. At present, all 37 companies have released their quarterly results.

In terms of revenue, among the 37 companies, only two companies, Jiuan Medical (1.495 billion yuan) and Antu Biological (1.036 billion yuan), have Q1 revenue of more than 1 billion yuan; at the same time, nine companies, such as Shuoshi Biology and Zhijiang Biology, have Q1 revenue of less than 100 million yuan. Rendu Biological, at the bottom of the list, Q1 revenue is less than 40 million yuan.

Judging from the year-on-year increase or decrease in revenue, the Q1 revenue of a total of 12 companies increased year-on-year, and none of them increased by more than 100%. The biggest increase was Kehua Biology (98.13%). At the same time, Q1 revenue fell for 25 companies compared with the same period a year earlier, with 12 companies falling by more than 80 per cent. Take POCT leading Jiuan Medical as an example, the company's Q1 revenue reached 21.737 billion yuan last year, but only 1.495 billion yuan this year, a decrease of 93.12%.

In terms of net profit, the net profit of Q1 of six companies, including Jiu'an Medical Care (601 million yuan) and New Industry (355 million yuan), exceeded 100 million yuan; at the same time, the net profit of Q1 of seven companies, including Ruieng Gene and Liedman, was less than 10 million yuan; the net profit of Q1 of Rendu Biological, Oriental Biology and other four companies was negative, with losses ranging from 6 million yuan to 50 million yuan.

Judging from the year-on-year increase or decrease in net profit, the Q1 net profit of a total of 12 companies increased year-on-year, including Kehua Biology, Toujing Life, Inot and other three companies with an increase of more than 100%. At the other end of the list, the Q1 net profit of 25 companies fell from the same period last year, including 7 companies such as Oriental Biology and Shuoshi Biology, which fell by more than 100%, while 11 companies, such as Anxu Biology and Shengxiang Biology, fell by 80% to 99%.

The first quarter performance of A-share POCT company dropped sharply.

On the whole, A-share POCT's performance in the first quarter of this year showed a trend of rout. The future think tank believes that in the past few years, the COVID-19 epidemic has brought huge incremental market space, driving up the prosperity of the POCT industry. How to find a new performance growth point for the POCT industry in the post-epidemic era is a common problem faced by POCT companies.

The stock price fluctuates with COVID-19 's epidemic situation.

It can be seen that the development of the POCT industry in recent years is closely related to the epidemic situation of COVID-19. In the secondary market, the share price of Aotai Biological also fluctuates with the COVID-19 epidemic.

According to Wind data, Aotai Bio landed on the Stock Exchange Kechuang Board on March 25, 2021, with an IPO price of 133.67 yuan per share and an opening price of 145 yuan per share. Due to the endorsement of COVID-19 's epidemic concept shares, Aotai Biotech reached 229.98 yuan per share on the first day of trading, closing at 173.94 yuan per share on the first day, up more than 30 percent from the issue price, and the turnover rate was as high as 62.31 percent.

The trend of share price since the listing of Aotai Bio (former reinstatement right)

However, Aotai Bio's share price "broke" less than a month after listing, and then all the way down. By October 2021, Aotai hit a low of 95.64 yuan per share, but then bottomed out and hit a high of nearly 230 yuan on its first day of listing in January 2022.

However, due to a variety of factors, Aotai Bio's share price was quickly defeated, falling for a long time after April 2022. As of May 9, Aotai Bio closed at 95.62 yuan per share, down nearly 30% from the offering price, and the company's market capitalization was 5.154 billion yuan.

To some extent, the stock price of Aotai Biology is "broken", which is also the epitome of the subsequent weakness of COVID-19 's epidemic concept stock. Wind data show that between 2020 and 2022, nearly 20 POCT companies listed in A shares, many companies because their business is highly related to COVID-19 nucleic acid testing, these companies are also considered to be listed by opportunity.

Many COVID-19 epidemic concept stocks "break"

Wind data show that as of the close of trading on May 9, nine COVID-19 epidemic concept stocks were still in a "broken state", with many companies falling below the offering price of more than 50 per cent. In the post-epidemic era, how much investment value these companies still have depends more on how they transform and how they perform, and investors need to observe carefully. (produced by thinking Finance) ■