Europe and the United States have basically matured, and China started late. Before 2006, the international science service industry was still dominated by small and medium-sized family enterprises, with relatively single business. Multinational giants capable of providing one-stop services had not been born, and the industry concentration was low. In 2006, thermoelectron merged with Fisher Scientific to become thermofisher scientific, a leading one-stop scientific service enterprise for scientific research reagents, experimental consumables and instruments and equipment. Since then, the international life science service industry has opened an era of M & A. Through mergers and acquisitions and large-scale development of Companies in the industry, the industry concentration has increased rapidly. At present, international giants such as Thermo Fisher, German Merck, danach and evanton have been born, occupying a leading position in the international market. China’s science service industry started late. Although it has developed rapidly under the promotion of national policies in recent years, compared with the developed markets in Europe and America, China’s science service industry has a large number of enterprises, small scale, single product category, relatively backward technology and weak competitiveness. The localization rate of foreign capital is still low, and the service market in China is still dominated by science.
Multiple factors promote the development of the industry. First, in recent years, the state has continuously issued relevant policies to effectively support the development of the industry. Second, China’s scientific research expenditure has maintained a faster growth rate than that of developed countries. At present, the proportion of China’s scientific research expenditure in GDP still has great room for improvement compared with developed countries. It is expected to maintain a faster investment rate in the future, driving the demand of China’s scientific service industry to maintain a rapid growth. Third, R & D investment in China and the global pharmaceutical market has maintained a rapid increase. China’s policies support the innovative development of the pharmaceutical market. Compared with developed countries, there is still much room for improvement in R & D investment in China’s pharmaceutical market. Fourth, there is much room for domestic substitution. At present, China’s life science service market is still dominated by foreign capital and highly dependent on imports. Xi Jinping the general secretary pointed out that major scientific and technological achievements in the field of life safety and biosafety are also important to the country. It is necessary to strengthen basic research in the field of life science and breakthroughs in key core technologies of medical health. In the future, Chinese enterprises will have broad space for import substitution.
Investment strategy. First coverage, industry recommendation rating. Although China’s science service industry started relatively late, and compared with overseas leaders, Chinese enterprises are still small in scale and weak in competitiveness, the future development prospect of China’s science service industry is still relatively broad, and there is large import substitution space for Chinese enterprises in the future. It is suggested to pay attention to Sino Biological Inc(301047) (301047), Nanjing Vazyme Biotech Co.Ltd(688105) (688105), Guangzhou Jet Bio-Filtration Co.Ltd(688026) (688026), Acrobiosystems Co.Ltd(301080) (301080), Shanghai Aladdin Biochemical Technology Co.Ltd(688179) (688179), Shanghai Titan Scientific Co.Ltd(688133) (688133), Suzhou Nanomicro Technology Co.Ltd(688690) (688690), Novogene Co.Ltd(688315) (688315) with strong R & D ability, rich products and advantageous channel layout.
Risk warning. Risks such as new product R & D, trade friction, loss of core talents, intensified market competition, iterative technology upgrading, less than expected capacity expansion or overcapacity.
