Huada Gene released its semi-annual report for 2018. In the first half of 2018, its operating income increased by nearly 30%. Meanwhile, the net profit after deducting non-recurring gains and losses increased slightly. Specifically, during the reporting period, Huada Gene achieved operating income of 1.141 billion yuan, a year-on-year increase of 28.44%; net profit attributable to shareholders of listed companies was 208 million yuan, an increase of 8.73%; The net profit of shareholders of listed companies after deducting non-recurring gains and losses was 168 million yuan. The company intends to distribute a cash dividend of 2.00 yuan (RMB, including tax) to every 10 shares of all shareholders, and is expected to pay a total cash dividend of RMB 80 million.
On July 14, 2017, Huada Gene was officially listed and became the 2001 listed company of Shenzhen Stock Exchange. Huada Gene is a genomics diagnosis and research service provider, providing genomics diagnosis and research services for medical institutions, scientific research institutions, enterprises and institutions through genetic testing and other means.
Sales expenses are twice as much as R&D investment
It should be noted that non-recurring gains and losses accounted for an increase in revenue growth. After deducting non-recurring gains and losses, net profit increased by 2.62% year-on-year. Among the non-recurring gains and losses, the government subsidized 18.02 million yuan and entrusted others with an investment income of 30.6 million yuan.
The net cash flow from operating activities was -70.04 million yuan, a decrease of about 3.2 times from the 35.85 million in the same period of the previous year. Huada Gene explained that this was due to the increase in sales revenue, the corresponding increase in the cost of purchasing goods, receiving cash for payment, and paying employee compensation.
The operating cost of Huada Gene has increased by more than 50% to 519 million yuan, mainly due to the expansion of sales scale, resulting in a corresponding increase in costs. Sales expenses increased by 17.35% to 201 million; management expenses increased by 30.84% ​​to 167 million yuan.
According to Huada Gene, among its management fees, R&D expenses “invested over 100 million yuan, an increase of 41.4% year-on-year, and R&D accounted for 8.8% of operating incomeâ€.
It is worth mentioning that as a technology company, Huada Gene has been questioned that its R&D investment has shrunk year by year.
Prior to 2015-2017, the amount of R&D investment of Huada Gene was 102 million yuan, 177 million yuan, and 174 million yuan, accounting for 7.88% of operating income. 33%, 8.32%. At the same time, the company's sales expenses far exceed the R&D investment. Taking 2017 as an example, the company's R&D expenditure accounted for 8.32% of the revenue, which is much lower than the 19.18% of the company's revenue during the same period. .
The semi-annual report showed that the amount of R&D investment was 100 million yuan, an increase of 41.40% year-on-year. However, the sales expenses for the same period were still about 2 times of R&D investment, reaching 201 million yuan, an increase of 17.35% year-on-year. The proportion of R&D investment and sales expenses in operating income was 8.76% and 17.72%, respectively.
Core business gross profit margin showed a year-on-year decline
Among the four major business segments of Huada Gene, Huada Gene's income from reproductive health services in the first half of 2018 was 622 million yuan, basic research services were 176 million yuan, and complex diseases were 302 million yuan. The research and development is 0.39 billion yuan.
With the implementation of the Chinese precision medicine program and the improvement of people's health awareness, more and more ordinary people will use genetic testing as the preferred disease diagnosis method. The main factors driving the development of the genomics application industry are: continued positive policies, huge industrial development space and continuous technological advancement.
In recent years, the gene sequencing market has grown rapidly, from 794 million US dollars in 2007 to 5.9 billion US dollars in 2015. It is expected to maintain rapid growth in the next few years. It will reach 13.8 billion US dollars in 2020, with a compound annual growth rate of 18.7%.
However, the gross profit margin of two core businesses of Huada Gene's reproductive health and basic research showed a year-on-year decline. In the first half of 2018, the gross profit margin was 69.89% and 27.08%, respectively, which was 6.05 and 17.21 percentage points lower than the same period of the previous year.
The report also shows that in the foreseeable future, genomics-related industries will achieve breakthrough development in four major areas: 1. Gene technology will be widely used in research fields such as complex diseases, agricultural genomics, microbiology and metagenomics. Will bring great changes to human health, agriculture and environmental protection; 2, genetic technology applied to reproductive health, will significantly reduce birth defects and improve human health; 3, tumor genome research will reveal the pathogenesis of tumors, tumor genome sequencing Technology has become the basis of individualized treatment of tumors; 4, genomic technology combined with the latest scientific research results of traditional clinical medicine, the formation of precision medicine , revolutionary changes for disease diagnosis, treatment, clinical decision-making.
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