Industry perspective
The epidemic situation in overseas markets has developed again, antigen detection products have a wide range of application scenarios, and the demand side sustainability may exceed expectations. Covid-19 antigen self-test product has been widely used in European countries since 2021, which is an important detection means in epidemic prevention and control. In February 2021, Germany took the lead in introducing the relevant approval and access system, and then Austria, France, Belgium, the Netherlands and other countries launched the white list channel for antigen test access respectively. At the end of 2021, Omicron was prevalent overseas, and the epidemic rebounded in the United States, Australia, Japan and other countries. Antigen self-test products were used for epidemic prevention, and the demand for products increased rapidly. China is one of the major producers of antigen detection products. Chinese enterprises actively respond to overseas demand and rapidly increase production capacity. According to the data of China Customs, the export of antigen products increased by 146% month on month in December 2021. Relevant enterprises are expected to achieve a breakthrough in performance since 2021. At present, as the incidence of Omicron overseas tends to be stable and the detection volume has dropped, we expect that the relationship between supply and demand, volume and price will tend to be stable in the future; Antigen detection products are gradually adopted by many countries, and the demand is sustained or higher than expected.
Covid-19 drugs and antigen detection or combined use, antigen products may become the normalization demand in epidemic prevention and control. On March 1, 2022, US President Biden mentioned in his state of the Union speech that he plans to launch a “test and treatment” program, that is, people can be tested in pharmacies. If they are positive, they can get antiviral drugs free of charge on the spot. We believe that if the plan is promoted on a large scale in the United States and antigen detection may become a normal demand product for epidemic prevention in the future, the United States may obtain relevant manufacturers of fdaeua or obtain more sustainable orders. As of March 6, 2022, there were 13 OTC antigen testing products and 5 professional antigen testing products, among which OTC products involved many Chinese enterprises.
Antigen self-test helps Hong Kong epidemic prevention and control. On March 5, 2022, 37529 covid-19 cases were reported in Hong Kong. Since December 31, 2019, the cumulative number of cases has exceeded 440000. In order to achieve the goal of early detection, early isolation and early treatment, the Hong Kong government is purchasing a large number of rapid antigen test kits for different groups of people to detect, so as to identify patients as soon as possible and cut off the virus transmission chain. The rapid antigen test needs to be combined with the results of clinical diagnosis and other laboratory tests to complete the qualitative detection of the antigen in the samples of suspected infected persons. Hong Kong citizens can purchase rapid antigen test kits from market retailers for voluntary testing. At the same time, the government provides rapid antigen test kits free of charge to designated high-risk and specific groups and residents’ anti epidemic people. The brands of antigen kits freely distributed by the government to designated groups include Shenzhen Yhlo Biotech Co.Ltd(688575) , Beijing Hotgen Biotech Co.Ltd(688068) , Guangzhou Wondfo Biotech Co.Ltd(300482) , Abbott and other Chinese and foreign enterprises.
Investment advice
Omicron virus is highly contagious, and there is still uncertainty about covid-19 virus variation in the future. For example, if covid-19 drugs are widely used in combination with detection in the U.S. market, we expect that the demand for antigen self-test products may change from emergency demand to normalization demand; At the same time, covid-19 antigen home detection may be further widely used in other regions of the world in the future. Under the above circumstances, the performance sustainability of covid-19 antigen detection products may exceed expectations, and relevant enterprises may continue to benefit.
Key companies: Zhejiang Orient Gene Biotech Co.Ltd(688298) , Guangzhou Wondfo Biotech Co.Ltd(300482) , Anxi biology, Hangzhou Biotest Biotech Co.Ltd(688767) , Shenzhen Yhlo Biotech Co.Ltd(688575) , etc.
Risk tips
Fierce competition in the industry, the risk of product price reduction, the risk of unqualified product quality control, the risk of demand decline caused by the improvement of the epidemic situation, etc.
