Based on the upstream molecular testing market, Helicobacter pylori testing products are expected to open the company's rapid growth curve Kangwei Century is a comprehensive supplier of the entire industry chain layout in the field of molecular diagnostics. It has accumulated more than 10 years in the fields of raw material enzymes, nucleic acid preservation, and nucleic acid extraction and purification. In recent years, it has expanded into the middle and downstream of the industry chain, launching molecular test kits and testing services. We are optimistic about the company's underlying technology transformation advantages. The company's valuation is within a reasonable range, such as rapid promotion of Kangjianyou series products and moving into a new stage of marketing system construction. It is estimated that in 2022-2024, the company's revenue will be 518/592/992 million yuan respectively, and the corresponding EPS is 1.68/1.70/2.95 yuan/share respectively. Compared with comparable companies, the company's valuation is within a reasonable range. First coverage, giving a “buy” rating.

Since its establishment in 2010, the company has collaborated to develop the entire “core molecular materials+kit+testing service” industry chain. Since its establishment in 2010, the company has always focused on core technology in the field of molecular testing. It has successively formed a total of 23 core molecular detection technologies on 6 technology platforms for enzyme raw materials, nucleic acid preservation, nucleic acid extraction and purification, quantitative fluorescence PCR, genetic sequencing, and nucleic acid mass spectrometry. The company participated in the formulation of a number of national standards and industry standards for molecular testing, established an industry position and provided sufficient impetus for subsequent development. Relying on its own core molecular testing technology, the company has developed a variety of innovative products and services, and has market-leading advantages. It has achieved the integrated layout of “core molecular materials+kit+testing service” in the core part of molecular testing, and the business has developed collaboratively. On the customer side, the number of the company's customers grew rapidly from 1,315 in 2019 to 2,750 in 2021, and the number of continuing customers accounted for a stable share of revenue. In terms of marketing system construction, it is expected that in 2023, the company will continue to expand its sales force and further promote the construction of a marketing network.

New products: Lay out molecular screening for digestive tract diseases. The company has broad market prospects for Helicobacter pylori series testing products. The company strategically enters the field of Helicobacter pylori molecular testing and early colorectal cancer screening. The Helicobacter pylori testing market currently exceeds 10 billion dollars, with great potential. Benefiting from the accumulation of the company's core molecular testing technology, the company's Helicobacter pylori nucleic acid testing product obtained the first Class III certification in China based on stool samples in December 2022. It has a first-mover advantage and is estimated to have a market leadership advantage of more than 3 years. Through strengthened channel construction, it is expected to bring a large increase in revenue to the company in the next few years. The company formulated a personalized diagnosis and treatment plan for Helicobacter pylori drug resistance. According to the progress of R&D projects related to the “Prospectus”, related products are expected to be marketed within 2023 or the first half of 2024. In the early cancer screening market, the company strategically lays out the colorectal cancer screening field, and is expected to continue to enrich gastrointestinal molecular testing products in the future, and the continuity of performance will be guaranteed.

Risk warning: The risk of falling revenue from COVID-19 and the risk of new product promotion falling short of expectations.