This article is the 424th original work of deep diving atom
At the turn of 2021 and 2022, the medical field is very lively. First of all, Helicobacter pylori became a hot spot and was listed as a clear carcinogen, coinciding with the fact that at this time, the "ghost tube" used by Nuohui Health to check Helicobacter pylori, which focused on high-incidence cancer home early screening, obtained the NMPA Class III medical device certificate on January 6, 2022; taking advantage of the fact that on December 28, 2021, the Ministry of Industry and Information Technology and other ten departments jointly issued the "14th Five-Year" Medical Equipment Industry Development Plan to promote the development of medical devices. Mindray Medical ushered in the opening of 2022, and then on the evening of January 13, 2022, it announced the proposed 1 billion yuan repurchase plan for the company's shares.
During this time, the most eye-catching is Jiuan Medical, a manufacturer of "home medical devices" that has long been outside the market attention, with the new crown kit successfully out of the circle and the stock soared. On the evening of November 7, 2021, it was announced that its US subsidiary's new crown antigen home self-test OTC kit was authorized by the FDA for emergency use (EUA), and as of January 17, 2022, it closed at 82.81 yuan / share in the morning, achieving 28 limits in the previous 50 trading days. After a short period of madness, it finally returned to rationality, and before the performance was implemented, the stock price began to fall.
△ Jiuan Medical stock
01
hardware crossover IVD,
Jiuan Medical won the US market
Before the epidemic, Jiuan Medical's business was very simple, mainly manufacturing and selling sphygmomanometers, forehead temperature guns, blood glucose meters and other household medical devices. In the midst of many competitions, Jiuan Medical's performance is not outstanding, the revenue is stable all year round, and the revenue in 2019 is always increasing rapidly, but it is only 710 million yuan.
△ Revenue in recent years
In order to increase its competitiveness, Jiuan Medical has also tried the road of transformation, through the binding with mobile communication devices, to create intelligent medical hardware, in order to launch explosive products on the new retail platform; in addition, another strategy appeared in the field of chronic disease management, launching the "O+ O" Internet + medical model of diabetes diagnosis and treatment. The two legs of Jiuan Medical are all standing at the outlet of the market, and although these two areas are the outlet, there are still few players who have passed. This also leads to the limited harvest of Jiuan Medical, and its market share still lags behind multinational giants such as Omron, Johnson & Johnson, and Roche, and also lags behind domestic leading players such as Sannuo and Yuyue.
Jiuan Medical, which is struggling to explore in the transformation, has not significantly improved its performance, and has achieved negative results in deducting non-net profit and net cash flow from operating activities for 7 consecutive years. However, Jiuan Medical has eaten through the dividends of the epidemic.
Seizing the demand for new crown testing, Jiuan Medical resolutely entered the market, although the field has a low research and development threshold and fierce competition, but Jiuan Medical also has its own "geographical advantages" and "people". Compared with other domestic medical device companies, Jiuan Medical has always been more focused on foreign business, in the past decade, Jiuan Medical has been deeply involved in the US market, not only established a complete sales system and medical resources, but also accumulated enough experience in product certification.
△ Domestic and foreign revenue accounted for
In 2020, the COVID-19 outbreak broke out globally, and the demand for household medical devices and epidemic testing rose. Jiuan Medical's revenue also rose a record 184% to break the 2 billion mark; but in the first three quarters of 2021, the epidemic began to stabilize, which also led to a sharp decline of 86% in Jiuan Medical's performance.
Entering 2021, the widespread spread of Aumetic Rong has once again "renewed life" for Jiuan Medical. On amazon website in the United States, Jiuan Medical became the highest-selling new crown antigen home self-test OTC kit product. In September 2021, the U.S. Department of Defense and the Department of Health and Human Services jointly authorized four collaborations to purchase COVID-19 testing products totaling $647 million. On November 8, 2021, Jiuan Medical announced that its subsidiary, iHealth Home COVID-19 Self-Test Kit, has been authorized for emergency use by the FDA.
Then, Jiuan Medical continued to win large contracts in the United States, with orders totaling about 1.18 billion yuan in New York State, about 940 million yuan in Massachusetts orders, and 8.1 billion yuan in kit procurement contracts signed by the U.S. Army Contract Management Command.
With the signing of the 10 billion contract, the stock price of Jiuan Medical has soared from 3 billion to about 38 billion.
02
The inflection point of the epidemic has arrived,
Can the contract be enforced?
Because the death rate of the new crown is not high and the transmission capacity is extremely strong, there is no case where all infected people die and the virus dies with it. How can the epidemic disappear?
In Zhang Wenhong's view, there are two ways for the new crown pneumonia to disappear: one is that the vaccine comes out and all are vaccinated; the other is herd immunity. The first route is well understood, and it is believed that most people have completed the vaccination. The second way is even more cruel, and in the early days of the epidemic, many people in Europe and the United States held this concept.
With the mass production of vaccines, in reality, the development of viruses must also conform to the theory of evolution, survival of the fittest. In 2021, the COVID-19 pandemic began to take on variants, first with Delta and then with Aumikron. The emergence of the highly contagious Opmiqueron, which is highly contagious for the United States, may be a turning point in the epidemic. This highly transmissible, low-lethal variant of the virus may allow most of the body to produce antibodies to achieve herd immunity.
Back in the United States, although the daily additions have reached hundreds of thousands or even millions. This has also made most U.S. residents accustomed to the new crown, and starting on February 2, 2022, the United States will no longer even count the number of new crown deaths and confirmed cases of new crown. Does this mean that the United States has tacitly accepted that the era of herd immunity has arrived?
△ The trend of new confirmed cases in the United States
On November 11, 2021, Jiuan Medical said in response to investors' questions at the Shenzhen Stock Exchange interactive easy that the current monthly production capacity of the NEW CROWN home self-test OTC kit of the US company is 100 million copies, and it plans to increase the production capacity to 200 million copies per month in early 2022. However, with the United States ignoring the new crown, can Jiuan Medical's contract still be fulfilled?
In 2007, the FDA published the Emergency Use Authorization Guidelines for Pharmaceutical Products and established eucalyptus operating procedures, and when the EUA declaration is terminated, all EUA issued based on the declaration will no longer be valid. This means that the United States can stop its contract with Jiuan Medical at any time.
Perhaps Jiuan Medical has doubts about whether the contract can be performed, on the evening of January 14, 2022, Jiuan Medical's announcement prompted five major risks: the risk of uncertainty in the development of the epidemic in the United States, the risk of logistics and transportation under the continuous shortage of air and sea channel capacity, the risk of return and recall caused by quality problems in individual product batches, the supply risk caused by changes in the domestic epidemic situation or other force majeure factors, and the buyer's risk that the US government has the right to terminate the contract at any time due to its own factors.
With the resumption of production by many foreign medical enterprises, the competitive pressure of Jiuan Medical will also be greatly increased. With the arrival of the inflection point of the epidemic, enterprises that follow the trend and enterprises with deep accumulation are doomed to not have the same ending, and the future of Jiuan Medical is still worrying.
03
The "sickle" of Jiuan Medical is full of power
In the distribution of benefits, the practice of Jiuan Medical has always been interesting.
At the beginning of 2020, Liu Yi, chairman of Jiuan Medical, submitted the "Proposal on Encouraging Employees of the Company to Increase Their Holdings of the Company's Shares", advocating that employees buy their own shares, while Liu Yi was selling the company's shares, and since 2019, ShiheZisanhe Equity Investment Partnership (Limited Partnership), which Liu Yi holds more than 90% of the shares, has frequently sold shares of Jiu'an Medical.
△ Shihezi THREE and shareholding situation
On October 28, 2021, Jiuan Medical launched the 2021 Stock Option Incentive Plan, with 353 grants and an exercise price of 6.49 yuan per share granted, with 7.37 million grants. On the same day, Jiuan Medical stock was only 5.86 yuan, still lower than the exercise price. Then, with the surge in stock prices, the plan progressed smoothly, and Jiuan Medical announced that it had completed the registration of the grant of the 2021 stock option incentive plan as of January 14, 2022. Since November last year, Jiuan Medical has received four letters of concern from the Shenzhen Stock Exchange, three of which asked whether the company had catered to market hotspots and hyped up the company's stock price.
The first exercise period of the 2021 Stock Option Incentive Plan is from the first trading day 16 months after the grant date to the last trading day within 28 months of the grant date, that is, until mid-May 2023. At the same time, compared with the 2019 business, the growth rate of operating income in 2022 is not less than 40%, that is, 990 million. If U.S. orders go well, this performance can be easily fulfilled. The shrewdness of Jiuan Medical is that even if the order in the United States fails to go as scheduled, the employees who get a large number of options have enough motivation to promote the company's performance and maintain the company's stock, but whether the performance of the employees after cashing out can be consistent.
In the past few years, there have been a number of companies in the financial, contract fraud behavior, for example, in 2007, Hangxiao Steel Structure claimed to get 34.4 billion orders, 3 months the stock price soared 6 times, and then Hangxiao Steel Structure executives were caught counterfeiting, the stock price fell from 34 yuan and fell back to 4 yuan. Although the situation is not the same as that of Jiuan Medical, if the United States does not implement the contract with Jiuan Medical, will it reproduce the market performance of Hangxiao Steel Structure.