Haitong Securities: The respiratory multiplex testing market is expected to continue expanding, suggesting attention to INNOVITA and others

According to the Zhitong Finance APP, Haitong Securities released a research report stating that the competition among nucleic acid testing products in the domestic respiratory multi-detection market is relatively fierce, while there are relatively few antigen and antibody products. INNOVITA has multiple exclusive products for respiratory antigen/antibody multi-detection, while Shengxiang Biotechnology is promoting the "home rapid testing model" in collaboration with Meituan. The barriers for OTC respiratory multi-detection products in the United States are relatively high, with the number of approved products gradually increasing since 2024. Chinese companies that have obtained FDA home testing EUA authorization include Jiuan Medical, Wanfu Biology, and Aikang Biology. The firm believes that companies with early product approvals and comprehensive categories are likely to gain greater opportunities, recommending attention to INNOVITA (688253.SH), Shengxiang Biotechnology (688289.SH), Jiuan Medical (002432.SZ), and Wanfu Biology (300482.SZ).

Haitong Securities' main viewpoints are as follows:

The prevalence of seasonal respiratory diseases worldwide has increased compared to pre-epidemic levels, leading to a significant rise in testing demand.

With the continuous advancement of China's hierarchical medical system, the release of multiple clinical practice guidelines and expert consensus related to respiratory diseases, and the improvement of patients' awareness of early diagnosis and treatment, the respiratory testing industry is rapidly expanding. In 2024, Shengxiang Biotechnology's revenue from respiratory products is expected to double year-on-year, while INNOVITA's total revenue is projected to grow by 30% year-on-year, with an 88% increase in the first half of 2024. Currently, the COVID-19 virus and influenza virus are gradually showing alternating epidemic patterns. The firm believes that in the post-pandemic period, seasonal influenza will exhibit more mixed infection patterns, and multi-detection will facilitate precise diagnosis and treatment of respiratory infections, likely promoting long-term expansion of the testing market.

Differential diagnosis is gradually becoming an industry consensus, with multi-detection covering a wider range at lower prices.

Conducting pathogen differential diagnosis in clinical settings aids targeted treatment. According to the medical quality control indicators released by the General Office of the National Health and Family Planning Commission, medical institutions must use the positive rate of influenza pathogen diagnosis for quality control before using antiviral drugs for influenza. Multi-detection products can achieve precise and rapid identification of multiple common respiratory pathogens in one test, offering higher efficiency and better cost-effectiveness, with substantial clinical value, and are expected to become a more effective diagnostic solution.

The domestic market for respiratory testing products is expected to exceed 8 billion yuan, with further expansion in the 2C market.

In 2008, 2013, and 2018, the two-week consultation rates for residents with respiratory diseases (upper respiratory infections, pneumonia) were 39.2 per thousand, 23.7 per thousand, and 49.5 per thousand, corresponding to 1.36 billion, 840 million, and 1.8 billion related respiratory consultations per year, respectively. Based on 1.8 billion consultations (not considering hospitalized patients) and assuming a penetration rate of 10-20%, with an ex-factory average price of 20-50 yuan, the firm estimates that under neutral expectations, the hospital market will have a space of 8.1 billion yuan, with lower prices corresponding to higher penetration rates.

Risk Warning: Risks of fluctuations in the prevalence of respiratory diseases, industry policy risks, risks of product development not meeting expectations, and valuation fluctuation risks, etc