21st century business herald reporter Yang Ping intern Zha Yufan report from Shenzhen

On July 22, 2023, the board celebrated its fourth anniversary. The listed companies on the Science and Technology Innovation Board, which are positioned at the core of "hard technology" and seizing the commanding heights of technological innovation, have become a company with "hard technology" as the industrial characteristic and technological self-reliance on science and technology on the stage of high-tech industry with increasingly fierce international competition. A new force with a core mission of self-reliance.

Huada Zhizao (688114.SH) is a stronger member of this group. The company is the only domestic manufacturer of full-flux clinical-grade gene sequencers that can be mass-produced. Through independent research and development, the company has a number of core patents such as "DNBSEQ sequencing technology", "regular array chip technology" and "sequencer opto-electromechanical system technology". Its sequencing technology ranks among the three mainstream high-throughput sequencing technology routes in the world.

On September 9, 2022, Huada Zhizao was listed on the CRE Board for only nine months, and was included in the benchmark index of the domestic "hard technology" field-the "CRE 50 Index" in the regular adjustment of the relevant index of the SSE on May 26, 2023 ".

"The inclusion of the 'Science and Technology Innovation 50 Index' reflects the capital market's recognition of the company's science and technology innovation attributes. It not only further broadens the investment channels for investors in the company, but also enhances the attractiveness of BGI in the capital market." Recently, Wei Wei, secretary of the board of directors and senior vice president of BGI Zhizao, said in an interview with a reporter from 21st Century Business Herald.

Help Gene Technology Inclusive

As the "crown bead" of life science and medical industry, gene sequencer is the field with the deepest technical barriers in the field of gene, and is at the top of the value chain of gene sequencing industry.

At present, the only one that can break the overseas monopoly with self-developed patented technology and compete with international giants in sequencing quality has naturally become the focus of market attention.

Huada Zhizao has launched three series of models around the gene sequencer business segment: E series, G series and T series, covering the full matrix of "low throughput-medium throughput-high throughput-ultra-high throughput.

in 2022, the total number of new installed capacity of various types of gene sequencers made by huada zhi will exceed 600 in the world, of which the total number of new installed capacity will exceed 470 in China and 130 in foreign countries. By the end of 2022, the company's cumulative installed capacity will exceed 2,500 units, and the total installed capacity has achieved sustained and rapid growth.

In the sequencer business segment, the company will achieve revenue of 0.29 billion yuan in the Asia-Pacific region in 2022, an increase of 18% year-on-year; revenue of 0.25 billion yuan in Europe and Africa, an increase of 84% year-on-year; revenue of 0.06 billion yuan in the Americas, an increase of 228 percent year-on-year; and revenue of 1.16 billion yuan in the domestic region, an increase of 32% year-on-year.

In addition, the company's gene sequencer business maintained a good growth trend in the first quarter of 2023. In the first quarter, the gene sequencer business realized revenue of 0.43 billion yuan, up 12% year on year. In addition, the gross margin of the gene sequencing business has steadily increased, to 64% in the first quarter of 2023, an increase of about 3 percentage points compared to 2022.

in February this year, huada zhizao released the ultra-high throughput sequencer DNBSEQ-T20 × 2, with an annual productivity of 50000 human whole genome sequencing, which can reduce the cost of single human whole genome sequencing to less than us $100.

"When the cost of gene sequencing technology drops to a certain level, gene sequencing will gradually become a key technology to drive the transition from traditional medicine to precision medicine. Therefore, the release of T20 is not just a new device, it will accelerate human research on genomics, promote the application of medical health, and help achieve the goal of universal access to gene technology." Wei Wei said.

Talking about the impact of the listing of the Science and Technology Innovation Board on the company, Wei Wei believes that this represents the market's recognition of BGI's technological innovation capabilities and sustainable development capabilities in the field. The funds raised in the board can help the company continue to optimize product research and development, manufacturing, marketing and channels, information construction layout, etc., to help the company achieve high-quality development.

"At present, our 'research and development and production project of gene sequencer and supporting equipment reagents based on semiconductor technology' has been invested and completed. The construction and implementation of this project will help the company to increase investment in technological research and development of related products in the field of gene sequencing and laboratory automation, and further expand the production capacity of related products of the company by adopting advanced technology and manufacturing equipment. to better meet the growing market demand of customers in different downstream application fields for products in related sectors of the company." Wei Wei further said.

"Unlock" the two global sequencing markets

In addition to the smooth progress of the fundraising project, BGI Zhizao's frequent reports of litigation disputes in overseas markets have also made its internationalization more smooth.

on June 19 this year, the complaint Committee of the European patent office (EPO) announced the ruling on the patent invalidation dispute between global sequencing giant Inmena (Illumina) and Huada Zhizao. The results show that the Inmena EP3002289 patent is invalid. This means that BGI will no longer be subject to EP289 patent restrictions in countries where the outcome of the ruling is involved in patent litigation.

This is not the first contest between the two companies. The dispute was traced back to May last year. Huada Zhizao also won a patent dispute with Illumina in the U.S. market, not only winning the latter's $0.325 billion (about 2.2 billion yuan) of net compensation, but also agreeing not to fight patent lawsuits in the U.S. for three years.

This rare victory in the history of Chinese science and technology not only attracted great attention at home and abroad, but also made BGI, which was about to land in the capital market at that time, stand at the forefront of China's intelligent manufacturing to the world.

"At present, we have made significant progress in patent litigation, and the business expansion of most of the countries and regions involved in the lawsuit will no longer be affected, which will help the company to further open up important international markets such as Europe and the United States and broaden the company's global business coverage." Wei Wei said.

in terms of regional distribution of the global market, according to data released by Market Research Future and other institutions, the global gene sequencing market in 2020 is the most widely distributed in Europe (38%), followed by the Americas (34%), with a total market share of about 72% in Europe and the United States.

in January this year, CG US, a subsidiary of huada zhizao, announced that all sequencing products of huada zhizao were on sale in the United States. In June, the company's subsidiary CG reached a cooperation with San Diego Biotechnology Company Invivoscribe and California Encoji Group (AccuraGen) to cooperate based on DNBSEQ-G99 sequencers and DNBSEQ-T7 sequencers, respectively.

in the European market, huada zhizao announced at the ESHG conference the addition of important local partners from Spain and Switzerland. Not long ago, Huada Zhizao signed a cooperation agreement with AddLife AB, one of Europe's largest clinical testing and laboratory equipment distributors, to accelerate the expansion of the company's sequencer and laboratory automation equipment market in the Nordic region and boost the internationalization process.

with the increasing enrichment of product qualifications and the improvement of localized marketing teams, by the end of 2022, huada smart manufacturing business will be distributed in more than 90 countries and regions on six continents, serving more than 2,000 users worldwide.

"In the future, the company will open more markets according to the market characteristics and business opportunities in different regions." Wei Wei said, "BGI has always been committed to providing advanced life science and technology core tools to bring more possibilities for the progress of the industry. Therefore, we are firmly pursuing our globalization strategy and hope that through continuous innovation and ecological construction, we will work with users around the world to make greater contributions to the biodiversity of the planet and human health."