Huada Gene Sequencing Platform and Global Layout Concern.

In May, as the annual reports and quarterly reports of listed companies were successively disclosed, the enthusiasm of the agencies for investigations also increased. According to relevant statistics, a total of 635 A-share listed companies were investigated in May, and 247 companies were intensively visited by more than 10 institutions.

BGI has always been quite mysterious because it has genetic technology at the tip of the biotechnology pyramid. This time, the time when Huada's genes were listed on the market for one year was over. Each organization showed its focus on the company. According to the records of the investor relations activities of Huada Gene Disclosure, representatives of 187 institutions including Gaochun Capital, Southern Fund, and Guosen Securities conducted research on the company on May 17th.

Over 100 organizations participated in the survey

On May 17th, BGI held an investor meeting and exchange meeting at Shenzhen National Gene Bank. 187 institutions including QFII, trust companies, fund companies, and securities companies attended the on-site activities, including Gaochun Capital and Dacheng Fund. Oriental Fuhai Investment Management, Gaotejia, Guoxin Securities Economic Research Institute, Guosen Securities, Tongchuang Weiye and other famous institutions all participated in the survey. At the same time, senior executives including Yin Dao, CEO of Huada Gene, Liu Na, Vice President, and Chen Qiqing, Chief Financial Officer attended the meeting.

At the conference, Chen Qiqing, the chief financial officer of BGI, introduced the company's 2017 annual results.

According to reports, in 2017, BGI’s operating income was 2.096 billion yuan, a year-on-year increase of 22.44%; net profit was 398 million yuan, a year-on-year increase of approximately 20%. In terms of gross profit margin, reproductive health services are the business with the highest gross profit margin. In 2017, the gross margin of the business was as high as 67.77%. The gross profit margins for complex diseases and basic research were 44.38% and 43.11%, respectively.

In addition, regarding the R&D expenses that biotech companies are generally concerned about, Chen Yuqing stated that in 2017, the company’s overall R&D expenses accounted for about 8.3% of revenue, and in 2018 the company’s investment in R&D would exceed 10% (accounting for operating income), ie 2018 At that time, the entire company will have greater and more powerful resources in R&D.

Regarding the future performance of BGI, Chen Yuqing said, “We are very confident that the overall revenue will maintain growth in the future, and net profit will maintain steady growth.”

Institutions focus on project progress

At the 2017 annual performance recommendation meeting held in April, BGI highlighted its investment in the new sequencing platform and its globalization. At the meeting of investors, agencies also expressed concern about the progress of BGI in these two projects.

In the interactive question and answer session of this research activity, some organizations asked how the company is now developing its third-generation sequencing service platform. For this problem, BGI said that the saturation of the first three generations of sequencing instruments is currently over 90%, and it is basically in a state of full-load operation. It has great application prospects for the third-generation sequencing technology market for scientific research, as long as it is stable and continuously updated. Replacement, the market is relatively stable, and can mature.

Responding to questions from institutional investors about how the company competes with the genetic sequencing companies in the country, BGI said: "First, there are several aspects of competition: if it is a service project, In order to avoid falling into the Red Sea process, BGI has always insisted on the idea of making friends, and we hope that it will be a joint R&D, not just one sequencing. Cooperation will also introduce Huada Gene to do other community projects. Overall, there are competitions, and BGI hopes to use its own differentiated advantages to get projects and achieve localization.”