Recommended logic: 1) China's allergy testing and self-exempt testing market space is large, the penetration rate is low, and the market size growth rate is expected to remain above 15%; 2) Haoobo is the domestic leader in allergy testing. The number of allergens is ranked first, with a market share of over 30%, and the first to introduce quantitative testing, which is expected to grow rapidly in the future; 3) The market share of overseas companies with self-exempt testing is over 80%. The company is the first to introduce chemiluminescence technology in China, and there is a lot of room for import replacement.

The penetration rate of allergy tests and self-exempt tests in China is low, and there is broad room for future growth. China's allergy testing market grew from 400 million yuan in 2017 to 600 million yuan in 2020, with a compound growth rate of 15%, which is growing relatively fast. Overall, there are more than 300 million allergy sufferers in China. Assuming that the penetration rate reaches 10% in the future, the market size is expected to reach 3 billion yuan. However, allergy testing in China is in its infancy. There is a huge gap between testing rates and developed countries, and the potential market is broad. At present, the number of patients with autoimmune diseases in China has reached 50 million. Assuming that the penetration rate reaches 20%, the market size is expected to reach 4 billion yuan. In 2020, China's self-exempt testing market is 1.5 billion yuan, and there is still plenty of room for growth in the future.

The performance of leading allergy testing companies is expected to continue to grow rapidly. The company is in a leading position in the field of allergy testing products in China. The test products cover 56 types of IgE allergens and 80 types of food-specific IgG allergens. At present, the company continues to increase investment in research and development. There are 13 new IgE allergens registered for registration, and 25 allergens have already been set up for research. In the future, projects that can detect single-point allergens and combined tests will cover 111 allergy testing projects. It is expected that as the variety of allergens increases, the company's position in the industry will be further consolidated.

At the same time, the company took the lead in introducing quantitative testing methods, which have significant advantages. It is expected that allergy testing will continue to grow rapidly in the future.

It was the first to introduce chemiluminescence self-exempt testing, which can be expected to be replaced by speeding up imports. China's self-exempt testing market is mainly occupied by overseas companies, and there is a lot of room for import replacement in the future. The company has an advantage over importers and traditional methodologies on the chemiluminescence technology platform. The fully automated chemiluminescence technology of nanomagnetic particles can achieve accurate quantification. The detection sensitivity, precision and efficiency are higher. The test throughput is significantly leading, and the operation is relatively simple. The import substitution momentum is sufficient, which is expected to become a new growth point.

Profit forecasts and investment recommendations. The compound growth rate of the company's net profit is expected to reach 45% in 2021-2023. The company is a leading allergy and self-exempt testing enterprise in China. The allergy testing industry is leading and is expected to continue to grow rapidly. The self-exempt test was the first to introduce chemiluminescence self-exempt testing to accelerate imports and replace expectations. Optimistic about the company's long-term development, initial coverage, and a “holding” rating was given.

Risk warning: The company's R&D falls short of expected risks, industry competition increases the risk, and the risk of product price reduction.