Perhaps, the nucleic acid testing companies that failed to land on the ** exchange under the epidemic have become the ** "insulators" in the post-epidemic era. Recently, according to the Shenzhen Stock Exchange, Fapon Biotech and the sponsor Huatai ** submitted applications separately and took the initiative to withdraw the registration application documentsThe IPO application status of Peng Biotech on the GEM has been changed to "terminated registration", becoming the first company to cancel the IPO registration process in the first year of the Dragon
As a biotechnology company established for more than 20 years, Fapon Biotech has successfully seized the epidemic outlet, with a significant increase in revenue in the past few years, and plans to land as early as December 2020 to seize the capital tuyere and make capital reserves for the post-epidemic era, howeverAfter more than three years of preparation and efforts, this goal has not been successful
Perhaps, behind the wave of IPO cancellations of many new crown testing-related companies, Fapon Biotech's IPO road has been blocked in a short period of time. At the same time, there seems to be not much choice for Fapon Biotech, and technological innovation is an optimal path.
The helplessness of raw material manufacturers
Founded in 2001, Fapon Biotech has been focusing on the R&D, production and sales of core raw materials for in vitro diagnostic reagents, and in 2009, it became a leading manufacturer of IVD century raw materials in China. After that, Fapon Biotech began to lay out molecular diagnostics, pharmaceuticals and AI medical fields.
Like many other biotech companies betting on the new crown, Fapon Biotech has also benefited a lot。It is reported that Fapon Biotech mainly provides in vitro diagnostic reagent raw materials and in vitro diagnostic reagent solutions in the detection of new crowns. These products and services may include core components of reagents and semi-finished products of reagents. In particular, the upstream of the card position ensures the revenue and market share of Fapon Biotech.
From 2019 to 2022, Fapon Biotech's revenue was 28.9 billion yuan, 106.8 billion yuan, 233.2 billion and 270.2 billion yuan; The net profit attributable to the parent company was 05.9 billion yuan, 63.3 billion yuan, 147.6 billion and 9$3.3 billion; However, revenues from products related to specific acute respiratory infections were 69.7 billion yuan, 161 billion yuan, 187 billion yuan. Excluding the new crown products, the revenue of Fapon Biotech's other businesses has not shown explosive growth, which also reveals that although Fapon Biotech has carried out business transformation, the transformation does not seem to be successful.
However, Fapon Biotech also has to face the same problem as other nucleic acid testing companies - receivables. At the end of each period from 2020 to 2022, the accounts receivable of Fapon Biotech were 1700 million yuan, 3600 million yuan and 7300 million yuan.
Looking back now, after losing the new crown testing business, the revenue and market influence of many testing companies have been greatly reduced. After returning to normalcy, many nucleic acid testing companies have lost their competitiveness, even if other business layouts were carried out, but the revenue and stock price were greatly downgraded.
Previously, in the prospectus, Fapon Biotech also gave a hint about the contingency of the new crown. Fapon Biotech said that if the new crown pneumonia epidemic is effectively controlled in the future, the future sales revenue of new crown-related products may decline significantly, and there is a risk of a significant decline in the company's future operating performance. Looking at it now, Fapon Biotech's helplessness for the future is very obvious.
In 2019, Fapon Biotech's net profit margin was 1988%, rising to 59 in 202031%, further increased to 64 in 202145%。Perhaps the initial positioning of raw materials determines that it is difficult for Fapon Biotech's revenue to increase significantly, and the gross profit margin is low
In 2022, the "New Oriental" corn of 6 yuan a piece was questioned as too expensive. In this regard, Dong Yuhui said that the grain is cheap and hurts the peasants. At that time, New Oriental also seemed to be hoping to improve its products through its own influence, so as to improve the quality of the source crops. The crops in the hands of farmers can be compared to the raw materials of Fapon Biotech, which does not have enough influence and is difficult to improve the quality of the product, so it can only accept the model of low price and volume.
Focus on marketing over R&D?
According to the previous prospectus, Fapon Bio's product system includes more than 1,400 raw material products, more than 80 self-developed and successfully developed reagent solutions and 5 instruments that have reached mass production conditions.
In terms of technology accumulation, Fapon Biotech has outstanding performance in patents. As of the end of 2021, it has applied for more than 520 domestic and foreign patents. Among them, 153 domestic patents have been authorized, 6 overseas patents, and more than 80 PCT patent applications. Invention patents account for more than 80% of the published and pending patents.
During the reporting period, Fapon Biotech's R&D expenses were 112.2 billion yuan, 185.4 billion yuan and 302.4 billion yuan, accounting for the proportion of operating income respectively. 95% and 1119%。A total of 600 million yuan has been invested in three years, with a compound annual growth rate of 6416%。
Through products, patents and investment, we can see the innovation ability and R&D strength of Fapon Biotech in the field of biotechnology。Compared with other well-known diagnostic raw material companies in the industry, Fapon Biotech is in a leading position in terms of the number of patents and invention patents.
From 2019 to 2021, Fapon Biotech's sales expenses were 03.7 billion yuan, 05.8 billion and 1300 million yuan. Wages and salaries account for the majority of sales expenses. For example, in 2020, the proportion was as high as 7851%, accounting for 6724%。Previously, the "IPO Observation Post" of Phoenix.com Finance found that the total number of marketing employees of Fapon Biotech in 2021 is 116, which means that the average salary of Fapon Biotech's marketing personnel is 75410,000 yuan.
Compared with the influence of R&D, Fapon Biotech's "marketing reputation" has attracted wide attention. The average salary of marketing personnel is 750,000 yuan, which also makes many netizens shout for the welfare of nucleic acid companies
In reality, Fapon Biotech's salary may not be so high. Wages and salaries increased more than 3 times from 24.64 million yuan in 2019 to 87.47 million yuan in 2021. The corresponding revenue growth is up to 8 times. It is common sense to sell more money and get more money, and there is no need to say more. Along with the decrease in revenue, it is natural that sales wages will also decline significantly.
Is "mom-and-pop shop" a shackle to self-innovation?
Fapon Biotech said in the last version of the prospectus on July 4, 2023 that from the current situation,It is expected that the company's operating performance in 2023 will decline significantly
From 2020 to the end of 2022, Fapon Biotech's funds were 7600 million yuan, 12600 million yuan and 14200 million yuan. In addition to having 1.4 billion yuan in deposits in the bank, Fapon Biotech also purchased 33.4 billion yuan of wealth management products, and 42.9 billion yuan of negotiable certificates of deposit, with a total of more than 2.1 billion yuan of available funds. Despite the decline in the testing business, the cash balance of 2.1 billion yuan can ensure the daily operation of Fapon Biotech. However, this money does not allow Fapon Biotech to develop unbridled.
According to the original plan, Fapon Biotech successfully IPO and can raise 250.6 billion yuanIt is used for the construction project of core raw materials for in vitro diagnostic reagents, the R&D and production projects of in vitro diagnostic instruments and supporting reagent solutions, the construction project of R&D center technology platform, the construction project of marketing network, and the replenishment of working capital. As a result, Fapon Biotech transitioned from the new crown testing business to other businesses, but the failure of the IPO put Fapon Biotech in a difficult situation.
According to the prospectus,Fapon Biotech 9380% of the shares are controlled by Cui Peng and Cao Fei。Cui Peng and Cao Fei directly hold Fapon Biotech 1204% and 124% of the shares, indirectly controlling 5696% of the shares, indirectly controlling 23 of Fapon Biotech through Baiao Technology56% stake. In addition to Wenbo Investment, Baiao Technology and Cui Peng, other shareholders of Fapon Biotech holding more than 5% of the shares He Zhiqiang.
The high concentration of shares is a double-edged sword for the company, and the vision and ability of the controller will determine the height of the company.
Standing out from a group of raw material manufacturers, it is inseparable from Cui Peng and Cao Fei. Equity means the concentration of voice and decision-making power, which allows Fapon Biotech to plan the field of raw materials for a long time in the early stage of development and develop rapidly. This laid a solid foundation for the company's subsequent development of other businesses such as molecular diagnostics, pharmaceuticals, and AI medical care.
As Fapon Biotech enters more and more cutting-edge technology fields, the requirements for decision-makers will become higher and higher. This is also why Fapon Biotech has made an early transformation, but its business and influence are still lagging behind other emerging companies. In particular, Cui Peng and Cao Fei have been in charge of the company for more than 20 years, and their age is also increasing, and as they get older, the threshold for understanding and accepting new things will also increase.
Fapon Biotech also once hoped to quickly cut into other fields by buying, buying, buying, buyingFor example, between November 2018 and October 2021, Fapon Biotech acquired all the shares of Sequlite, which was established in 2017, but as of the end of 2022, there are still 50.8 billion yuan of goodwill. However, in the first half of 2023, only 2 sequencers from Sequlite were sold. In particular, one of the five core personnel of Sequlite before the acquisition has left, and subsequent product updates and iterations will also be affected. In the field of high-throughput sequencers, it is also a challenge to break through the hands of giants such as Illumina, Thermo Fisher, and MGI.
Previously, in order to more smoothly complete the new shareholders' shareholding and the transfer of shares to the old shareholders, the last round of new shareholders such as Sequoia Shangchen, Panxin Investment, Defu Investment, Cathay Investment, Huaxing Zhige, Huayi Medical and Liu Qiang and other old shareholders negotiated to transfer the shares to Wenbo Tianjin according to the new shareholders' shareholding **20% discount on the premise of not attaching VAM conditions, and then Wenbo Tianjin will transfer all these shares to the new shareholders, and Wenbo Tianjin will conduct a VAM with the new shareholders.
In May 2022, shareholders Zhou Guorong and Huang Yijun filed a lawsuit against Chen Zhengxu, Dingfeng Mingdao Company, the issuer, Cui Peng, Wenbo Tianjin, and Liu Qiang with the Futian Court on the grounds of a dispute over infringement of the rights and interests of the company's investors, and the following month, the Futian Court took litigation preservation measures against the 190,800 shares of the issuer held by Cui Peng at the request of the plaintiff. After Fapon Biotech submitted for registration, the company and the actual controller became defendants, which will have a more or less impact on Fapon Biotech's IPO。Looking back now, I wonder if the management could have been more flexible, and this dispute could have been reduced.
In 2022, there will be 5 new crown testing-related companies that have passed the meeting, namely Fapon Biotech, Kangwei Century, Daktrovic, Zhishan Biotech, and Ruiboao. Among them, Fapon Biotech is the first company to pass the meeting. However, Kangwei Century took the lead in landing**. With the strengthening of the CSRC's review of nucleic acid companies, Fapon Biotech's IPO future is worth worrying.