Finance Association, May 20 (Reporter He Fan) Reagent products contribute more than 80% of Antu Biotech's (603658.SH) revenue, and its gross margin is also increasing. At the performance briefing held today, the company's financial director, Sister Feng Chao, said bluntly that the share of reagent products will increase in the future.

In addition, Miao Yongjun, chairman of the company, predicted the growth rate of the molecular, microbiological and other sectors, and as harvesting gradually became an industry trend, Fang Ruikuan, director of the company, believes that a national collection meeting is likely, and that the implementation of mining in Anhui will have a positive impact on the company. Second, related instrument sales and overseas expansion plans are also topics investors are concerned about.

According to reports, Antu Biotech is mainly engaged in the R&D, manufacture, integration and service of in vitro diagnostic reagents and instruments. Its products include testing fields such as immunity, microbiology, biochemistry, molecules, and blood coagulation. In response to questions about instrument and reagent production capacity, Sister Feng said that the company has sufficient production capacity reserves for each product line, and no further details have been given.

The annual report shows that in 2023, the company's revenue for reagent products was 38.15 billion yuan, up 8.06% year on year, and gross margin increased 4.36 percentage points year on year; revenue from instrument products was 482 million yuan, down 32.99% year on year, and gross margin decreased by 3.18 percentage points year on year.

Looking at segmented fields, in vitro diagnosis is classified according to testing methods and mainly includes several major aspects such as immunological diagnosis, biochemical diagnosis, microbiological, molecular diagnosis, hematological diagnosis, and POCT. Miao Yongjun said that the market share of the company's microbiological, biochemical, molecular and other sectors is much lower than that of the chemiluminescence sector. The biochemical sector itself has a high degree of localization, and there is little room for new markets; the growth rate of microorganisms will increase this year; the current growth rate of molecular production lines is very good, which has little impact on the company's overall growth rate, but the future can be expected.

In recent years, medical reform policies such as volume collection, sunshine procurement, and DRG in the field of in vitro diagnosis have been implemented one after another, and in vitro diagnostic reagent collection has become an important development trend in the industry. Today, the Office of the National Health Security Administration issued a notice on strengthening regional collaboration to improve the quality and expansion of centralized pharmaceutical procurement in 2024, stating that it will focus on key areas, actively promote the expansion of collection in 2024, and further promote centralized procurement of high-value medical consumables. In the national joint procurement work guided by the National Health Insurance Administration, it was mentioned that Anhui will take the lead in carrying out cooperative procurement of in vitro diagnostic reagents such as tumor markers.

On December 8, 2023, the collection results of the 25-provincial in-vitro diagnostic alliance led by Anhui Province were announced. According to statistics from the Anhui Provincial Health Insurance Administration, the average price drop of collection companies this time was 53.9%, which is expected to save nearly 6 billion yuan in annual procurement amounts. Among them, the eight infectious diseases (chemiluminescence method) had the highest drop of 65.2%, the lowest decrease of 50.01%, and an average decline of 54.14%. Among them, importers such as Abbott and Roche, as well as leading domestic companies such as Mindray, Antu, and New Industries, are all proposed to be selected with a drop of more than 50%.

Fang Ruikuan said that there are no statistics on the share of sales collected in 2023. It is expected that a nationwide collection will be a matter of probability, and the implementation of harvesting in Anhui will have a positive impact on the company. Furthermore, it added that after collection is implemented, the sales price will drop to a certain extent compared to the original sales price, but more growth should be achieved in terms of sales volume.

In the field of instruments, the annual report shows that in 2023, the sales volume of the company's instrument products was 2,114 units. Among the various instruments in the fully automatic magnetic particle chemiluminescence immunoassay system, the A2000Plus, A1000, A1000S, and A6000 have obtained medical device registration certificates. According to Miao Yongjun, in 2023, the company will install about 400 A6000 units, and about 800 A2000 units. Furthermore, the number of A6000 installed units in the first quarter of this year was more than 150 units, and the annual installation target is 700 units.

In terms of overseas expansion plans, in response to investors' questions, Antu Biotech said that the company is speeding up the pace of international market expansion and promoting product market entry, marketing and service localization. It already has relevant plans to establish overseas subsidiaries in some countries or regions, and the share of overseas business will gradually increase in the future.