Events
Omicron spread rapidly, and the number of newly diagnosed patients in many places reached an all-time high. On November 26, 2021, the World Health Organization named covid-19 variant strain b.1.1.529 Omicron and designated it as a strain of concern. On the 28th, a scientific and technological briefing released by the World Health Organization said that given that the mutation of the “Omicron” mutant may have immune escape potential and transmission advantages, the possibility of further transmission in the world is “very high”. According to the nature report, Omicron has 32 mutations in S protein, which is the largest mutation in S protein among the mutant strains at present. The number of mutations is twice that of the current popular delta virus. Mutants appeared in many places around the world, Omicron spread rapidly, and the number of newly diagnosed patients in many places reached an all-time high.
There is a strong demand for overseas antigen detection and nucleic acid detection, and Chinese manufacturers are the main suppliers. There are three main covid-19 virus detection methods: nucleic acid detection, antibody detection and antigen detection. Antigen detection is mostly used in overseas markets, involving Europe, the United States, Australia and other countries. Among them, the United States and Australia opened the use of antigen products later than Europe. As of January 11, 2022, 13 products in the U.S. market had been approved, and most of the approved products in the Australian market came from Chinese manufacturers. With the rebound of the global epidemic, the demand for overseas antigen detection market has increased, The global nucleic acid testing market rose accordingly.
Upstream raw materials may be stimulated by demand, and related businesses achieve high growth. The upstream raw materials of covid-19 reagent cover a wide range, involving key active substances, raw materials and components such as antigen, antibody, protease, NC membrane, deep well sector, and sample adding needle required by supporting instruments. During the epidemic period, due to the rapid rise in demand and the mismatch between supply and demand at the raw material end, many raw material enterprises in China responded positively to carry out targeted development to ensure the stability of the overall industrial chain. The consumables, raw materials and automation equipment in the production expansion process upstream of the detection products are expected to be in large quantities stimulated by the demand for covid-19 products.
Investment advice
In the short term, the number of newly diagnosed patients in the world is growing rapidly, and there is a strong demand for covid-19 antigen detection reagents overseas; In the medium and long term, the demand for epidemic prevention and control continues, and the market may have a new understanding of the long-term valuation level of covid-19 detection sector; Relevant enterprises will invest the anti epidemic demand profits into new product development and conventional business development. In the future, high-quality enterprises are expected to seize the opportunity and open up long-term growth space.
If the downstream products need to be expanded, the prosperity of the upstream raw material industry is expected to continue to improve, and the growth of enterprise income and profit can be expected. At the same time, with the continuous expansion of China’s demand and the gradual improvement of the supply chain, the domestic substitution level in the upstream field is expected to rise, and the development of relevant enterprises may accelerate.
Key companies
Zhejiang Orient Gene Biotech Co.Ltd(688298) , Andon Health Co.Ltd(002432) , Hangzhou Alltest Biotech Co.Ltd(688606) , Nanjing Vazyme Biotech Co.Ltd(688105) , Wuhan Easy Diagnosis Biomedicine Co.Ltd(002932) etc;
Risk tips
Global epidemic mitigation and supply expansion are superimposed, and the volume and price of tested products are down; Risk of deterioration of competition pattern; Risk of business expansion falling short of expectations
