Within two months, the share price soared 11 times, “demon stock” Andon Health Co.Ltd(002432) (002432. SZ) has frequently attracted the attention of the capital market.
What keeps Andon Health Co.Ltd(002432) rising is its U.S. subsidiary ihealth labs Inc. The New Coronavirus (SARS-CoV-2) antigen self testing OTC kit. In the morning of January 14, Andon Health Co.Ltd(002432) announced that the U.S. subsidiary signed a purchase contract for covid-19 household kit of RMB 8.102 billion.
However, it is worth noting that according to the Andon Health Co.Ltd(002432) announcement, the U.S. government can request to stop the execution of the contract without any reason and cancel the subsequent procurement, and the Seller shall bear the corresponding risks and possible losses.
signed a large order of 8.1 billion with the United States
Andon Health Co.Ltd(002432) the rise can be traced back to November 7. That night, the company disclosed the announcement on the subsidiary covid-19 antigen home self-test OTC kit obtaining the authorization of FDA and EUA.
The announcement shows that Andon Health Co.Ltd(002432) was informed at the early hours of November 6, 2021 in Beijing, and was authorized by the food and Drug Administration (FDA) to obtain the emergency use authorization (EUA) of New Coronavirus (SARS-CoV-2) antigen self testing OTC Kit (colloidal gold immunochromatography) of the US subsidiary iHealth.
After obtaining the U.S. emergency use authorization (EUA), the product can be sold in the United States and countries recognized by the U.S. EUA during the U.S. public health emergency.
After the news ferments, Andon Health Co.Ltd(002432) share price starts soaring mode.
Subsequently, Andon Health Co.Ltd(002432) was frequently updated on trading platforms such as “interactive easy” to reply to various information about the detection box.
On November 15 last year, Andon Health Co.Ltd(002432) said that the kit had begun mass production and had been sold well in the United States; The monthly production capacity is 100 million people. It is estimated that by the beginning of 2022, the production capacity will increase to 200 million people per month.
After that, Andon Health Co.Ltd(002432) disclosed information about this product for many times. For example, it costs $6.99 and can detect the Omicron strain. It has obtained an order in the United States. It is suggested that Tianjin Food and drug administration can give emergency approval… Each item is good news.
Some brokers believe that the sharp rise of Andon Health Co.Ltd(002432) share price is related to its frequent interaction on the interactive platform. With convenient products and large-scale mass production, the stock price of Andon Health Co.Ltd(002432) began to connect with the current epidemic anxiety.
Since January 12, Andon Health Co.Ltd(002432) has released good news one after another.
Subsidiary ihealth labs Inc has obtained purchase orders from several states in the United States, with a total amount of 2 billion yuan, equivalent to the annual revenue of 2.008 billion yuan in 2020, which will have a positive impact on the revenue and profit in 2021 and 2022.
In the morning of January 14, Andon Health Co.Ltd(002432) announced that ihealth labs, a U.S. subsidiary Inc and American ACC (US Army contract management command) signed a procurement contract on behalf of HHS (US Department of health and human services) on January 13, 2022 local time for ihealth covid-19 antigen home self-test OTC kit products (hereinafter referred to as “ihealth kit”).
The announcement shows that the US ACC is the main subordinate contract management department of the US Army Material Command, mainly undertaking most of the contract work for the US Army. The announcement said that the total amount of contract price tax was US $1.275 billion (including freight), about RMB 8.102 billion.
As of the closing on January 14, Andon Health Co.Ltd(002432) closed at 75.28 yuan, up 9.99% limit, with the latest market value of 36.03 billion yuan.
the U.S. government has the right to terminate the contract at any time
According to the Shanghai Securities News, Andon Health Co.Ltd(002432) such a sharp rise can no longer be explained by any fundamentals.
The antigen self-test box is not an exclusive secret recipe. Beijing Hotgen Biotech Co.Ltd(688068) , Lepu Medical Technology (Beijing) Co.Ltd(300003) are approved for use in Europe and America. Among the 69 covid-19 detection products approved in China, only three antigen detection kits include huadayin source, jinwofu biology and Guangzhou Wondfo Biotech Co.Ltd(300482) .
In China, antigen self-test products are not allowed to be used alone for detection and diagnosis, but only as an auxiliary role. Some people in the industry explained that generally, antigen detection can only be detected after the virus has accumulated to a certain concentration. Compared with molecular detection, the accuracy is not high. The demand for home testing abroad is increasing, and antigen kits are mainly exported.
In the past two months, the relevant departments of the exchange have successively issued four supervision letters or attention letters to Andon Health Co.Ltd(002432) with different focuses. In a recent letter of concern, the exchange asked the company to verify “whether there is a situation of selectively disclosing some information to hype the stock price”.
During this period, Andon Health Co.Ltd(002432) also issued announcements several times to remind of risks.
In the announcement on January 14, Andon Health Co.Ltd(002432) believes that there are five risks in performing the above 8.1 billion contract:
1. Risk of uncertainty in the development of epidemic situation in the United States: company’s demand for antigen household self-test kit products is directly related to the development of epidemic situation in the United States. Virus variation, vaccination and the introduction of covid-19 drugs all have an impact on the development of epidemic situation. Therefore, there is strong uncertainty in the development of epidemic situation in the future, This uncertainty may greatly affect the implementation of the kit product contract;
2. Logistics and transportation risk: due to the epidemic in the United States, the current shortage of transport capacity in air and sea transportation channels continues, the port is congested and the goods are seriously overstocked. If the shipped goods cannot be picked up in time, they will not be delivered on time according to the contract requirements. If the delivery date is seriously affected, the company may default, Or the buyer cancels the subsequent contract procurement after terminating the contract, the company shall also bear relevant losses if the contract cannot be fully implemented;
3. Quality risk: in the case of mass production, the batches of individual products may have quality problems, lead to the risk of return or even recall, which may lead to the buyer’s return, termination of the contract and cancellation of subsequent procurement, and the seller will bear relevant losses;
4. Supply risk: if the company cannot produce and deliver on time due to the change of epidemic situation in China or the decline of production capacity and output due to other force majeure factors, it may lead to the company’s breach of contract, or the buyer terminates the contract and cancels subsequent contract procurement, the company shall also bear relevant losses if the contract cannot be fully implemented;
5. Buyer’s risk: 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.
On the evening of January 16, Andon Health Co.Ltd(002432) issued an announcement again to remind the risk that the U.S. government has the right to terminate the contract signed between the company’s U.S. subsidiary and U.S. HHS (executed by the U.S. ACC representative) at any time due to its own factors, and there is uncertainty whether the contract can be fully implemented. In the previous announcement, the company mentioned the epidemic prevention related plans issued by the U.S. government, as well as the relevant policies, procurement and distribution plans and conditions of covid-19 antigen household self-test kit products. Investors are reminded that the relevant information and procurement involved in the above contents are not only for the company. Investors are requested not to misunderstand the contents and misinfer the changes it brings to the company’s performance.
Andon Health Co.Ltd(002432) also said that the company previously 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 are studying the proposal, and it is uncertain whether the proposal will be adopted.
after non deduction in the first three quarters of 2021
loss of 24.77 million yuan
According to the official website of Andon Health Co.Ltd(002432) , Andon Health Co.Ltd(002432) was founded in 1995 and listed on the Shenzhen small and medium-sized board in June 2010. It is an enterprise focusing on the R & D and production of health electronic products and intelligent hardware. It has successively launched personal health wearable devices covering the fields of blood pressure, blood glucose, blood oxygen, ECG, heart rate, weight, body fat, sleep, sports and so on, And obtained a strategic investment of US $25 million from Xiaomi technology to become a partner of Xiaomi ecological chain.
After listing, the company’s performance was poor, and the net profit loss occurred for the first time since listing in 2013. Until 2019 before the epidemic, the net profit of the annual report continued to show a loss for one year and a slight profit for one year. In the seven years from 2013 to 2019, the loss year was 4 years and the profit year was 3 years, with a cumulative loss of 280 million.
The covid-19 epidemic in the spring of 2020 will Andon Health Co.Ltd(002432) be “rescued” from this embarrassing situation. The company said, “the export of forehead thermometer and other epidemic prevention products to foreign countries began in mid March 2020, and the improvement of product sales has a positive impact on the company’s performance in this period. In addition, due to the increased demand for telemedicine during the epidemic, the overseas sales of the company’s Internet of things products such as sphygmomanometer, blood glucose meter, oximeter, scale and so on are also increasing.”
According to the 2020 annual report, the company’s operating revenue was 2.008 billion yuan, a year-on-year increase of 184.36%; The net profit was RMB 237 million, with a year-on-year increase of 775.21%. The performance achieved in 2020 also made the total net profit from negative to positive since its listing.
In the first three quarters of 2021, Andon Health Co.Ltd(002432) had a revenue of 790 million yuan, a reported decrease of 50.82%, a net profit of about 50.13 million yuan, and a loss of about 24.77 million yuan after deducting non-profit.
