The industry has developed rapidly and the market scale continues to expand. Biological research reagent is a necessary tool for scientific research. Its application scenarios are constantly enriched and there are many downstream customers. With the global active research and development of biological drugs and the in-depth exploration of life science mechanism, the global life science industry has developed rapidly. The global biological research reagent market is expected to reach US $24.6 billion in 2024; The Chinese market is expected to reach 26 billion yuan in 2024, and the compound annual growth rate of the Chinese market from 2019 to 2024 is about 13.8%.
Downstream scientific research + industrial two wheel drive, the future growth can be expected. The downstream of China’s biological research reagents are scientific research institutions and pharmaceutical industry users, and their R & D investment continues to increase, promoting the opening of biological reagent market space. From 2015 to 2020, the compound annual growth rate of China’s investment in life sciences reached 18.3%, reaching 100.4 billion yuan in 2020, and will continue to grow at a high speed in the future; The pharmaceutical industries such as biological drugs, vaccine research and development, in vitro diagnosis and so on have maintained a high boom, and the demand for supporting reagents has increased steadily.
Covid-19 epidemic brings development opportunities, and domestic substitution is at the right time. In 2020, covid-19 epidemic led to the restriction of global supply chain. Chinese enterprises seized the opportunity to innovate and develop covid-19 related products, with significant growth in performance and increasing market share. In addition, the technology accumulation of Chinese manufacturers’ technology development and customized services has strong competitiveness in some fields. We believe that Chinese enterprises can compete with overseas enterprises through flexible pricing strategies to promote the acceleration of import substitution.
Investment suggestion: we believe that under the background of China’s scientific research investment and the continuous high prosperity of downstream biomedical industry, China’s life science reagent industry will still maintain rapid growth, and the localization rate of the industry is still low at this stage. However, with the continuous increase of R & D and technology upgrading of Chinese enterprises, there will be a broad space for domestic substitution in the future. We are optimistic about the overall development of the industry and suggest focusing on: (1) high-quality target Nanjing Vazyme Biotech Co.Ltd(688105) , which has a strong ability to master the upstream and downstream technology and business expansion of functional protein reagents; (2) Technical company in the field of intensive cultivation of human protein Acrobiosystems Co.Ltd(301080) ; (3) Recombinant protein faucet with complete product range Sino Biological Inc(301047) .
Risk warning: downstream demand fluctuations affect orders and revenue of reagent companies; The R & D progress is less than expected; Domestic substitution is less than expected; Industry competition intensifies; Risk of technology iteration and upgrading; Core technology and brain drain risk.
