Key investment points
The global anti epidemic may become a “protracted war”, and the detection demand will be normalized
Omicron variant has outstanding immune escape ability, which triggered the climax of this round of overseas epidemic. Looking forward to the future, we believe that under the background of the large number of infected people in the world, new variants are bound to continue to appear, and the Omicron family has been confirmed by the academic community that it has poor cross antibody immunity with previous variants, and co infection, repeated infection and virus recombination have also been reported and confirmed. Therefore, it is difficult to think that Omicron will become the last “super variant” (for example, academia has called for a separate name for Omicron ba.2 strain), and the anti epidemic is expected to become a “protracted war”. Covid-19 detection products, as the first line of defense of the comprehensive anti epidemic system, are expected to have the same demand, and the subsequent emergence of “super variants” will bring periodicity.
Antigen self-test is expected to become the main force of long-term covid-19 detection in the world
With the continuous spread of the overseas epidemic, the carrying capacity of molecular detection began to be seriously insufficient. In particular, under the strong demand to speed up the resumption of work and school, covid-19 antigen self-test products began to be actively promoted overseas. Compared with nucleic acid detection, antigen detection has the advantages of no need for professionals, sites and instruments and fast result (15min). Although there is a slight gap in specificity and sensitivity compared with molecular detection due to methodological differences, it can be made up by repeated detection. Will there be alternatives in the future? (e.g. antigen instead of nucleic acid detection), we expect that the two dimensions of methodology and home self-test scenario will not be shaken, or innovations will be made in covid-19 – joint influenza detection and simplified sampling steps. Antigen self-test products are expected to become long-term mainstream detection tools overseas.
Overseas market: grasp the “six elements” of both supply and demand
How to evaluate the advantages and disadvantages of overseas markets and the benefits of Chinese manufacturers? We suggest to grasp the “six elements” of both supply and demand. From the perspective of the demand side, the first is the policy, such as the number of approved manufacturers, free distribution by the government, large purchase orders, etc; The second is the severity of the epidemic. The market in the outbreak period is more prone to run on medical resources, resulting in a stronger demand for home self inspection; The third is the ability to pay. Players will spontaneously choose the most profitable market. From the perspective of suppliers, the first is overseas channels. Enterprises with long-term overseas partners or overseas subsidiaries can often enter the market faster and obtain approval in advance; The second is production capacity. Of course, when there is still a gap between supply and demand, enterprises with large production capacity can give priority to seize the market and enjoy the “dividend period”; The third is the product quality. The severity of the epidemic will put forward higher and higher requirements for the sensitivity and specificity of products, and the defective products are bound to leave the site in advance.
Chinese market: Hong Kong epidemic catalysis, or will accelerate the opening
Recently, a serious epidemic broke out in Hong Kong, and covid-19 antigen self-test products have been applied, which may catalyze China to speed up the registration, approval and application of similar products. Compared with the current nucleic acid detection, on the one hand, antigen self-test can save the cost of instrument, site and labor for nucleic acid detection. At present, the price of covid-19 nucleic acid mixed test is still 20-40 yuan, which is significantly higher than the terminal price of antigen self-test kit in the current European market; On the other hand, it helps to grade and divert covid-19 detection, avoid the waste of medical resources caused by the unified use of nucleic acid, and alleviate the shortage of testing resources in the scenario of centralized detection demand. In terms of promotion rhythm, we believe that China’s epidemic prevention policy is more cautious, and there may be a transition period for some time in its application, but it is expected to take the lead in pilot application in some scenes, some groups or some regions.
Investment advice
We suggest to pay attention to: Zhejiang Orient Gene Biotech Co.Ltd(688298) , Asahi biology, Shenzhen Yhlo Biotech Co.Ltd(688575) , Hangzhou Alltest Biotech Co.Ltd(688606) , Beijing Hotgen Biotech Co.Ltd(688068) , Guangzhou Wondfo Biotech Co.Ltd(300482) , Wuhan Easy Diagnosis Biomedicine Co.Ltd(002932) . etc.
Risk tips
Overseas order risk, market competition risk, product quality risk, lower than expected risk of China’s market opening, etc.
