Events:
The company announced that Sun Company Xi Long USA, Inc. Completed the acquisition of a 15% stake in FulgentTherapeutics LLC of the United States; at the same time, it was also announced that the company and other shareholders increased the capital of Fujian Fujun Genome Biotechnology Co., Ltd., after the capital increase, the registered capital of Fujun Gene increased to 100 million yuan.
Fulgent is a standardized gene testing service organization for clinical molecular diagnosis certified by CLIA and CAP in the United States, with a large gene database and state-of-the-art technology and equipment, providing the most comprehensive gene testing services in the world. In the genetic testing database system of NIH, the most authoritative US national health agency in the world, Fulgent provides the largest number of genetic testing (single gene testing provides 4637 testing items, multi-gene combination analysis provides more than 170testing items), and serves many countries and regions in the United States, Canada, Australia, Europe, South America and Asia. Fulgent Diagnostics is also the world's highest application of next-generation sequencing technology for DNA sequencing and gene copy number analysis, and provides professional genetic counseling services.
Fujun Gene is a holding subsidiary established as the need of the overall strategic layout and development of the company's in vitro diagnostic service industry, aiming at the booming market prospect of gene sequencing, committed to providing international first-class gene diagnosis services for domestic medical institutions and general consumers.
Conclusion:
Maintain "buy" rating: the company actively distributes the market for in vitro diagnostic reagents. In 2014, it acquired 75% of Fujian New Continental Biotechnology Co., Ltd. to enter the field of in vitro diagnostic reagents. In April this year, it acquired the remaining 25% of the shares of New World, turning it into a wholly-owned subsidiary of the company.
Now the company has acquired 15% of Fulgent and set up Fujun Gene Biotechnology Co., Ltd., which will introduce international first-class gene diagnosis services into China. In addition to in vitro diagnosis, the company also established Xilong (Shanghai) Medical Technology Co., Ltd. to act as an agent for the sales of major international brands in the medical business section. Xilong (Shanghai) Medical reached 80 million in revenue after its establishment last year. The company is expected to make more than 30 million of its profits in the medical section this year, more than double that of the same period last year.
From 2016 to 2018, the company's EPS is expected to be 0.254, 0.370 and 0.479 yuan, maintaining "buy".
Rating.
Risk tips: 1. Macro-economic decline, the company's traditional business decline; 2. The market promotion of in vitro diagnostic reagents is not as expected.
