Reagent is the basic tool of scientific research, and the increase of scientific research investment drives the rapid growth of the industry. Life science is one of the most important research and development directions in the field of basic scientific research. Benefiting from the improvement of China's scientific research strength and the increase of scientific research investment, it has driven the rapid growth of the market scale of the upstream scientific research reagent industry. In terms of market scale, we estimate that in 2020, the scale of China's biological reagent market will be 20-30 billion, and the scale of chemical reagent market will be about 20-35 billion. With the rapid growth of demand in downstream application fields, the market potential of scientific research reagent is large. According to Frost & Sullivan data, the compound growth rate of China's biological scientific research reagent industry is expected to be about 13.8% from 2019 to 2024.
Foreign brands occupy the mainstream market in China, and domestic substitution is ongoing. Chinese reagent manufacturers started late, and foreign brands now dominate. Take the field of molecular reagents as an example, Nanjing Vazyme Biotech Co.Ltd(688105) is the absolute leader in the field of molecular reagents in China, but the market share in 2019 is only about 4%. The top four suppliers in China are foreign brands, with a total market share of 41%. Protein reagents and cell reagents are also mainly imported, Domestic manufacturers have a small market share. However, in recent years, with the continuous increase of R & D investment of Chinese manufacturers, the quality and performance of some products have been significantly improved (category richness, performance parameters and quality control, etc.), and the conditions for replacing imports have been met. On this basis, the advantages of cost performance and technical services are obvious. In addition, this epidemic highlights the importance of local supply chain, and the replacement import of domestic scientific research reagents is expected to accelerate.
The core of platform service providers lies in one-stop service experience, and product companies are oriented to meet customers' scientific research needs. We roughly divide China's upstream scientific research reagent enterprises into two categories: platform integrated service providers and product companies. The former represents Shanghai Titan Scientific Co.Ltd(688133) and youningwei, and the latter represents Nanjing Vazyme Biotech Co.Ltd(688105) , Acrobiosystems Co.Ltd(301080) , Shanghai Aladdin Biochemical Technology Co.Ltd(688179) . 1) For platform service providers: we believe that the core is to give customers the best purchase experience. By creating a one-stop comprehensive service platform, we can quickly bind customers after forming the advantage of product matrix through agent + self-research in the early stage, and cultivate customers' use habits. When the company carries out horizontal expansion based on a stable customer base (agent + self-research mode in the early stage), It can quickly enter new subdivided fields, and the cost of obtaining customers is relatively low. At the same time, the expansion of business field will also be positively transmitted to the customer experience. For example, Shanghai Titan Scientific Co.Ltd(688133) has accumulated a good customer base in the field of chemical reagents and consumables. At present, it is making efforts to enter the military into biological reagents, and the business field is expanding continuously; 2) For product-based Enterprises: we believe that the core is to meet the scientific research needs of customers. For such enterprises, the most important thing is to constantly polish the core technology, continuously optimize the product quality, and expand the richness of product series and downstream application fields. In addition, we highlight the cost-effective advantages of relative imports and the technical service advantages of local suppliers, Gradually gain the trust of customers, such as Nanjing Vazyme Biotech Co.Ltd(688105) building core technical barriers in the field of molecular enzymes, and gradually expanding from high-throughput sequencing and gene cloning to IVD, biological drug R & D / production and other fields, the growth space of the company continues to open.
Investment perspective: Generally speaking, China's scientific research reagent industry is in a high-profile cycle with increased scientific research investment and accelerated domestic substitution. We believe that both platform and product enterprises have significant long-term investment value. The reason is that China's scientific research reagent market is large enough, and the market share of domestic suppliers is very small at present, With a very high growth ceiling, the key is to understand the company's core competitiveness and the factors that open its market ceiling. We summarize this as follows: 1) the core competitiveness of platform enterprises lies in being ahead of their competitors and cultivating the use viscosity of customers as soon as possible, The establishment of this process depends on the richness of categories provided by the platform (through agents in the early stage), efficient warehousing and logistics, timely pre-sales / post-sales technical services, etc. at the present stage of the development of domestic reagent industry, the above factors all need the enterprise's efficient execution, whether by expanding upstream brands, expanding product matrix and establishing technical service system, In the final analysis, it reflects the strategic vision and management ability of the management, which is also the core factor whether the enterprise can expand its business horizontally; 2) The core competitiveness of product-based enterprises lies in the barriers and extensibility of underlying platform technology. Barriers determine their scarcity, and extensibility determines the expansibility of downstream application scenarios (i.e. market space). In addition, excellent product-based enterprises will understand the needs of customers from the perspective of R & D participants, and finally gain the trust of customers with professional service ability, That is, such enterprises need to have a deep understanding of the R & D process, so we believe that the R & D gene of enterprises is very important.
It is suggested to focus on: Shanghai Titan Scientific Co.Ltd(688133) , Shanghai Aladdin Biochemical Technology Co.Ltd(688179) , Nanjing Vazyme Biotech Co.Ltd(688105) , Acrobiosystems Co.Ltd(301080) , Sino Biological Inc(301047) , youningwei, Feipeng Biology (unlisted), Shanghai Zhaowei (unlisted), nearshore Biology (unlisted), Kaiyu Biology (unlisted), etc.
Risk warning: the risk of intensified market competition; The risk that the business expansion is less than expected; Risk that downstream demand growth is less than expected.
