The twilight of epidemic beneficiary stocks, when nucleic acid testing companies go public becomes a small probability event

According to investment guru Charlie Munger, to judge whether a business is a good business, it is necessary to ask: "How long can this situation last?" ”

According to this standard, the new crown nucleic acid testing business, although the ability to absorb gold is outstanding, may not be a good business. Because no one can predict how long the nucleic acid testing business can last.

However, this has not prevented different companies in the nucleic acid testing industry from following a "similar" development trajectory in the past few years:

Through the nucleic acid testing business, the original accumulation was quickly completed, and the IPO was completed to the peak of life. Today, members of the nucleic acid testing industry chain are still the main force of many capital market IPO companies.

Of course, the feast will eventually end. When more nucleic acid testing industry chain enterprises hope to go further, variables may quietly appear.

On November 21, the spokespersons of the Shenzhen Stock Exchange and the Shanghai Stock Exchange both said: strictly control market access and prudently promote the issuance and listing of nucleic acid testing related enterprises.

This may mean that the listing of nucleic acid testing companies will become a small probability event.

01 

Exponential growth in performance

Before the advent of the epidemic, the field of molecular diagnostics had attracted much market attention, but it was definitely not to the point of being hot.

In 2019, the market size of the entire molecular diagnostic track was only 8.4 billion yuan. Specific to the segments, the market size behind it is not outstanding.

However, in real life, there are always unexpected black swans, such as the new crown epidemic. It has changed the lives of countless people and the fate of the niche track of nucleic acid testing.

Since 2020, nucleic acid testing of hundreds of yuan at every turn has made the new crown nucleic acid testing industry a money-printing machine. The nucleic acid detection track has also changed from a small transparent to a behemoth that cannot be ignored.

According to BCCResearch's research report, the global new crown diagnosis market will reach $60 billion in 2020. In this market, it is naturally domestic enterprises that benefit the most.

Some companies that had previously performed mediocre have reached their peak by riding the east wind of dividends.

For example, Shengxiang Biotechnology, from 2017 to 2019 before the new crown epidemic, its revenue was only 225 million yuan, 303 million yuan and 365 million yuan, respectively; In 2020 and 2021, the revenue reached 4.763 billion yuan and 4.515 billion yuan respectively, directly increasing 15 times.

Shengxiang Biology is only a "microcosm" of the explosive performance of the nucleic acid testing track. As shown in the figure below, the performance of most companies has achieved exponential growth under the epidemic.

For now, the trend continues. In the first three quarters of this year, the performance of Lanwei Medical, Kaipu Biotechnology, Dean Diagnostics, Daan Genetics, Pony Testing, Jinyu Medical and other companies is still growing rapidly.

 02 

Capital markets staged a second spring

With the amazing revenue-generating ability of the nucleic acid business, the capital market has given positive feedback.

The above-mentioned Shengxiang Biotechnology has been highly sought after after its listing. On August 28, 2020, Shengxiang Biotech landed on the Science and Technology Innovation Board of the Shanghai Stock Exchange, and after the opening, Shengxiang Biotech's stock price soared by 195.17%, and its market value directly exceeded 60 billion.

Dai Lizhong, the actual controller of the company, also completely reached the peak of his life on the day of Shengxiang Biotechnology's listing, holding 32.02% of his shares, and his worth was close to 20 billion yuan.

In January 2021, after the share price of Jinyu Medical continued to rise, it once reached 175.76 yuan / share, an increase of nearly 3 times from the low point at the end of 2019.

After the stock price continued to rise, the market value of Jinyu Medical exceeded 80 billion yuan. Its actual controller, Liang Yaoming, is only 16% of the direct shareholding, and is worth as much as 128 small targets.

In the capital market, nucleic acid industry chain enterprises ushered in the second wealth movement, creating a group of billionaires.

In the face of this feast, no one wants to be left behind, and more and more nucleic acid industry chain enterprises hope to seize the rare window and realize the dream of going public. Nowadays, there are still many players in the nucleic acid testing track who want to hit the market.

For example, the recent explosion of Darkowei. Because of the nucleic acid testing business, the company generated revenue of 837 million yuan and net profit of 103 million yuan last year. And the helmsman of this company is the post-90s generation:

Wu Yingjie, the largest shareholder, was born in 1995 and has not graduated from university; The youngest shareholder was born in 2005 and is currently 17 years old and underage.

According to the official website of the Shenzhen Stock Exchange, Daktronics submitted its registration on October 14 and now only has to wait for the registration result. Not surprisingly, this will be another capital story.

Of course, not only Daktronics, but also members of the nucleic acid testing industry chain, including Zhishan Biologics, Riboao and other nucleic acid testing industry chains, are all impacting the IPO and looking forward to completing a transformation journey.

03

Going public as a low-probability event?

For now, though, this metamorphosis will belong to only a few.

On November 21, spokespersons of the Shenzhen Stock Exchange and the Shanghai Stock Exchange both said that they would strictly review the scientific and technological innovation attributes and sustainable operation capabilities of nucleic acid testing enterprises, and said that they will:

Strictly control market access and prudently promote the issuance and listing of relevant enterprises.

For investors familiar with the domestic capital market, it is necessary to understand roughly what the phrase "prudent advance" will mean for these companies.

Perhaps, the wave of IPOs of companies in the nucleic acid testing industry will continue, but it is destined to belong to only a few.

It is also understandable that the criterion for judging the value of a company is not only its short-term explosive performance, but also its future sustainability and robustness.

Obviously, nucleic acid testing companies cannot give investors a satisfactory answer on these two points. After all, the new crown nucleic acid test brings only a stage dividend.

Shareholders of listed companies seem to have predicted the "trend" early. Since last year, the opposite of the continuous growth of nucleic acid testing companies is the announcement that shareholders continue to reduce their holdings.

For example, in the second half of 2021, 4 important shareholders disappeared from the shareholder list of Golden Mile Medical.

On the one hand, the performance continues to grow, and on the other hand, shareholders continue to reduce their holdings, this contradictory phenomenon tells everyone that the dividend period may end at any time.

Nowadays, with the stricter review of IPOs, it has also been officially announced: the story of nucleic acid testing to promote performance growth, and then landing on the capital market IPO to become rich, is difficult to tell.