Event: on December 24, 2021, the 32nd meeting of the Standing Committee of the 13th National People’s Congress of the people’s Republic of China revised and adopted the law of the people’s Republic of China on scientific and technological progress, which will come into force on January 1, 2022. The law clearly states that the scientific and technological innovation products and services of domestic natural persons, legal persons and unincorporated organizations are Under the condition that quality and other indicators can meet the needs of government procurement, government procurement shall be purchased.
Core view
Domestic substitution in China’s scientific instrument industry is expected to accelerate. Scientific and technological innovation is the foundation of national prosperity and strength. The revision of the science and technology progress law is another revision of this basic law in the field of science and technology after a lapse of 14 years. Under the background of China’s accelerating the realization of high-tech autonomy and control, the bill provides a strong guarantee for improving the guarantee measures for scientific and technological innovation and accelerating the breakthrough of key core technologies. As a basic tool for scientific and technological innovation, the bill clearly proposes that under the condition that the function, quality and other indicators meet the procurement demand, the government procurement should purchase domestic instruments, and for the domestic instruments put on the market for the first time, the government procurement should take the lead in purchasing, and should not be limited on the grounds of commercial performance. The process of domestic substitution is expected to accelerate.
Encourage enterprises to strengthen original innovation, and relevant scientific instrument companies may benefit significantly. The bill points out that the State encourages enterprises to strengthen original innovation, and encourages enterprises to digest, absorb and re innovate the introduced technology. In terms of specific measures, the research and development expenses incurred by enterprises in developing new technologies, new products and new processes shall be paid before tax and calculated and deducted in accordance with the relevant provisions of the state; Allowing enterprises to research and develop instruments and equipment through science and technology can accelerate depreciation; Improve the financing system of science and technology enterprises through multiple channels, and support qualified science and technology enterprises to use the capital market to promote their own development. This encourages enterprises to increase R & D investment, and the demand for scientific services, especially scientific instruments, is expected to increase significantly. At the same time, it greatly improves the enthusiasm of R & D investment and financing development of relevant scientific instrument companies, and the rise of domestic instruments is expected to accelerate.
At present, the localization rate of China’s high-end scientific instruments is low, and the leading enterprises deserve attention. This bill echoes the “specialization and innovation” proposed at the meeting of the Political Bureau of the CPC Central Committee in July, hoping to speed up the domestic substitution of high-end technology. At present, the localization rate of high-end scientific instruments in China is low. Taking mass spectrometer as an example, the proportion of domestic mass spectrometer is less than 30%, and the proportion of high-end mass spectrometer is less than 10%. There is a huge penetration space for domestic mass spectrometer. The policy side has repeatedly encouraged the development of domestic scientific instrument enterprises, and the domestic leading enterprises taking the lead in development will benefit significantly, which is worthy of attention.
Investment proposal and investment object
The amendment of this bill shows that the state has paid more attention to the field of scientific and technological innovation, with particular emphasis on strengthening the vigorous procurement of domestic scientific instruments. We believe that high-quality enterprises with core products and technical barriers are expected to stand out. We suggest paying attention to Beijing Labtech Instruments Co.Ltd(688056) (688056, buy), Tofflon Science And Technology Group Co.Ltd(300171) (300171, not rated), Truking Technology Limited(300358) (300358, not rated), Zhejiangtailin Bioengineering Co.Ltd(300813) (300813, not rated) Suzhou Nanomicro Technology Co.Ltd(688690) (688690, not rated), etc.
Risk statement
The implementation of the policy is not as expected; The progress of instrument R & D and innovation is less than expected.
