Yesterday, Andon Health Co.Ltd(002432) (002432. SZ) issued a supplementary announcement that the US government has the right to terminate the contract at any time due to its own factors. According to the financial Associated Press reporter, five hours before the announcement, that is, shortly after the closing, the company's management just came forward to communicate with investors online. There was also a "Jiu\'An institutional research" group on wechat, and the number soon reached 500, including a number of pharmaceutical analysts of securities companies.
Liu Yi, chairman of the board of directors of Andon Health Co.Ltd(002432) will further release positive signals in the communication about the concerned order of covid-19 kit of 10.2 billion yuan in the United States. He said that the company is working overtime day and night to catch up with goods. At present, the production capacity is 200 million copies per month. Due to the sufficient supporting of raw materials and the increase of production mainly depends on the increase of workers, there is still room for improvement.
Liu Yi added that from the perspective of the company's production, the company's core raw materials such as antigens are imported, so the biggest risk of capacity expansion is employment.
In terms of specific capacity changes and expansion possibilities, Liu Yi said with a smile that at present, there are often people squatting at the gate of Andon Health Co.Ltd(002432) factory for observation and field research, and even found that someone sneaked into the factory for research.
overseas demand remains high
Andon Health Co.Ltd(002432) time window has obvious advantages
On December 22 last year, US President Biden announced that the federal government would purchase 500 million doses of home covid-19 testing reagent and provide it to the American people free of charge in January 2022. Liu Yi revealed at the conference call that the purchase order of 250 million ihealth kits announced by the company on the 14th of this month belongs to the purchase of the U.S. federal government and is required to be delivered within two months.
According to Liu Yi, Andon Health Co.Ltd(002432) holds 70% of ihealth labs, an American subsidiary Inc began to apply for FDA EUA authorization a year ago. At that time, the UK had begun to implement home self-test antigen kits, but the United States had not really started to use them. Seeing this opportunity, Andon Health Co.Ltd(002432) concentrates on mobilizing the company's capabilities for development.
As Andon Health Co.Ltd(002432) , which is not the main manufacturer of IVD (in vitro diagnostic products), why aim at the FDA approval with the most stringent standards? In this regard, Liu Yi expressed confidence mainly from three points: first, Andon Health Co.Ltd(002432) in the past, the business has interacted with FDA for more than 20 years and is familiar with FDA requirements; Second, Jiuan has a team of 70 or 80 people in the United States, which has played a great role in clinical, performance, experiment and other links; The third is ihealth labs, a joint venture between Jiu'An and Xiaomi Inc, which fully uses its own brand ihealth, not only has a high gross profit margin, but also has won the recognition of the mainstream market in the United States.
"So far, in fact, few manufacturers can really supply in large quantities in the mainstream market of the United States." Liu Yi said that the FDA's review of the original kit is very strict, and it is difficult to successfully approve the application through intermediaries. On the other hand, U.S. companies that have passed the FDA EUA approval can theoretically find foundries in China to expand production capacity, but their core measurement standards can not be changed at will.
In Liu Yi's opinion, home testing has the attribute of consumer goods in Europe and America. As for whether family testing can be applied in a wider range and in China, Liu Yi believes that it depends on the situation and degree of epidemic control, and the aggravation of the epidemic will increase its possibility.
At the exchange meeting, some investors were concerned about whether Andon Health Co.Ltd(002432) would apply to the EU and other countries and regions for use approval in the future. Liu Yi responded that he would not go for the time being. The company should first focus on doing a good job in the U.S. market and "fight this battle".
Can Chinese manufacturers who are currently doing OEM for international enterprises such as Abbott, Roche and Siemens directly enter the U.S. market like Andon Health Co.Ltd(002432) ? According to public information, Zhejiang Orient Gene Biotech Co.Ltd(688298) (688298. SH) and Aikang biology have produced rapid detection reagents for Siemens and other manufacturers. In addition, the rapid detection reagents produced by Medicalsystem Biotechnology Co.Ltd(300439) (300439. SZ), Hangzhou Biotest Biotech Co.Ltd(688767) (688767. SH), Guangzhou Wondfo Biotech Co.Ltd(300482) (300482. SZ) and other companies are also applying for FDA certification. Liu Yi said that in the end, it depends on who owns the EUA certificate. If it is only OEM and can not get the EUA by itself, it will be difficult to make the trip. Andon Health Co.Ltd(002432) this success was not achieved overnight, but accumulated by the company in the U.S. market for nearly 11 years.
Spring Festival production will not be affected
people often squat at the gate of the factory
Some investors asked whether the sustainability of the company in the U.S. market would be affected if the epidemic peak passed. Liu Yi said that the company's operation will follow the market environment. At the beginning of the covid-19 epidemic in 2020, the company and Xiaomi jointly launched frontal thermometer products, which also achieved explosive growth at that time. Although the market later changed to normal sales, the frontal thermometer products have created a good reputation, and its sales volume in the U.S. market is still the first. The future situation of the kit can also be deduced in the same way.
The covid-19 kit product has also made ihealth brand a household name in the United States. It is understood that the price of Jiuan kit products has been increased from the original US $17.98/box to US $19.9/box on the official website of the United States. The price increase is due to the rise of raw materials and labor costs and the newly included freight. The company's products are still the cheapest in the US market, and the price will not be easily adjusted in the field of public health and epidemic prevention in the future. Liu Yi said that in the next step, we will use the advantages of the brand to expand the sales of more products. "This is what we may consider in the next step. Now we mainly have to finish the battle of kit first."
For the signed us orders, Liu Yi said that the revenue and profit will be recognized when the orders are delivered normally. According to Andon Health Co.Ltd(002432) 's previous announcement, its contracts with the New York State Department of health and the United States ACC (U.S. Army contract management command) agreed to complete all delivery within 8 weeks and 60 days respectively, which also means that the formal performance will have an impact on Andon Health Co.Ltd(002432) 's performance in the first quarter of this year.
It is of concern that Tianjin where Andon Health Co.Ltd(002432) is currently located is in the critical period of Omicron epidemic. Will this affect the normal production and operation of Andon Health Co.Ltd(002432) ? Liu Yi said that the previous two rounds of nucleic acid testing and some factories were located in the control area, which had a certain impact on production. However, the closure of Tianjin will reduce the number of workers returning home for the new year. During the Spring Festival, the company will try its best to retain workers without affecting production capacity. As for the specific capacity change and the possibility of expanding production, Liu Yi said with a smile that at present, there are often people squatting at the gate of the Andon Health Co.Ltd(002432) factory for observation and field research, and even found that someone sneaked into the factory for research.
Regarding the prospect of sales and use of covid-19 kit in China, Liu Yi said that this can only be started after the product has obtained the Chinese medical device license. Previously, Andon Health Co.Ltd(002432) submitted the proposal on using family self-test box to realize Omicron covid-19 epidemic prevention 1 + 1 to Tianjin epidemic prevention and control headquarters. At present, relevant departments in Tianjin are still studying the company's plan. With regard to the use of family self-test, Liu Yi said that this is not a diagnostic tool, but a public health epidemic prevention and screening tool. The purpose is to reduce the risk of infection through timely screening. Nucleic acid is still the main diagnostic tool. Previously, the company recommended mainly providing home antigen screening in closed communities.
It is worth noting that Andon Health Co.Ltd(002432) also issued a supplementary announcement after the investor exchange meeting due to the continuous rise of the stock price limit. The company said that the U.S. government has the right to terminate the contract at any time due to its own factors. The above meaning means that the U.S. government can request to stop the execution of the contract without any reason and cancel the subsequent procurement. The Seller shall bear the corresponding risks and possible losses.
