(Report Producer/Author: Huachuang Securities, Pang Tianyi)
<h1 class="pgc-h-arrow-right" data-track="4" >, Aladdin is a leading manufacturer of scientific research reagents in China</h1>
Aladdin focuses on the research and development, production and sales of scientific research reagents, covering four major areas of high-end chemistry, life sciences, analytical chromatography and materials science, while supporting a small number of experimental consumables. The company independently creates "Aladdin" brand scientific research reagents and "core Silicon Valley" brand experimental consumables, which are widely used in colleges and universities, scientific research institutes and innovative enterprises, covering high-tech industries and strategic emerging industries such as biomedicine, new materials, new energy, energy conservation and environmental protection. At present, Aladdin has become a leading enterprise in the field of domestic scientific research reagents.
(1) The company has many years of independent research and development and market development experience
Shanghai Aladdin Biochemical Technology Co., Ltd. was established in 2009, formerly known as Shanghai Jingchun Industrial Co., Ltd. The company was changed to a joint-stock company in 2013 and listed on the New Third Board in 2014. In October 2020, Aladdin was listed on the Star Market with a ticker symbol of 688179.SH.
Since its establishment 12 years ago, the company adheres to independent innovation and research and development, and currently has more than 33,000 kinds of scientific research reagents in stock, which is one of the most complete suppliers in China. The company also has more than 68,000 2D and 3D molecular structure maps, more than 31,000 NMR maps, and more than 11,000 infrared maps. In 2011, the company created its own e-commerce platform "Aladdin", which currently has more than 145,000 registered users and has an important influence in the domestic scientific research reagent enterprise e-commerce platform. The company has been rated as "the most popular reagent brand by users" for 9 consecutive years, and for 6 consecutive years, it has been rated as "China's top ten enterprises in the chemical reagent industry", according to the comprehensive evaluation survey of domestic reagent brands in the national chemical reagent information station, the "Aladdin" brand has ranked first in the selection of varieties for 4 consecutive years.
(2) The company's equity is concentrated and the structure is clear
Xu Jiuzhen and Zhao Liping are the controlling shareholders and actual controllers of the company. Xu Jiuzhen and Zhao Liping directly hold 42.60% of the company's equity, and indirectly hold 2.37% of the company's equity through Jingzhen Culture and Shichuang Investment, totaling 44.97% of the company's equity.
(3) Operating income increased steadily, and the overall expense ratio showed a downward trend
The company's operating income and profit continued to grow rapidly. From 2013 to 2020, the company's operating income increased from 65 million to 234 million, with an average annual compound growth rate of 20.03%; the net profit attributable to the mother increased from 0.19 billion to 0.74 billion, with an average annual compound growth rate of 21.82%; the gross profit margin has always remained above 60%, which is at a high level in the industry.
The high-end chemical reagent business is a major component of the company's operating income and gross profit. The company's main business is scientific research reagents and supporting experimental consumables, of which scientific research reagents account for more than 95% of the main business income. Scientific research reagents can be divided into four major parts according to product properties and downstream application fields, including high-end chemistry, life science, analytical chromatography and material science, of which high-end chemical reagents account for a relatively high proportion, accounting for 59.6%, 58.5% and 53.2% of the main business income in the past three years, respectively, which is the main source of the company's income. With the rapid development of the reagent industry and the growth of research and experimental development (R&D) funding, the revenue of the four major types of reagent products has maintained steady growth. From the perspective of gross profit margin, the gross profit margin of the company's scientific research reagents is maintained at a high level, mainly because the scientific research reagent industry has higher technical, scale, capital and other barriers, and the company has a strong scientific research strength.
In recent years, the company's expense ratio has shown an overall downward trend. From 2018 to 2020, the proportion of the company's expenses to operating income during the period was 35.22%, 34.07% and 25.61%, respectively. In 2020, the decline in selling expense was mainly due to changes in accounting standards, and the decrease in financial expense was mainly due to the interest income generated by the company using some of the funds raised from the IPO for cash management.
(4) The company has strong solvency and good cash flow
The company's accounts receivable turnover rate remained basically stable. The accounts receivable turnover ratios for 2018-2020 were 10.56, 12.07 and 12.85, respectively, and the overall receivables collection period was in good quality within the credit period set by the company. In the past three years, the company's inventory turnover rate is 0.69, 0.7 and 0.93, which is at a low level, mainly because from the perspective of batch economy, the company's single batch of products are often greater than sales, and the company maintains a certain safety inventory of popular reagent varieties, and the inventory of goods is larger.
The company's solvency is relatively strong. From 2018 to 2020, the company's current ratios were 4.64, 5.07 and 15.74, the quick ratios were 2.56, 2.68 and 13.40, and the asset-liability ratios were 11.43%, 11.37% and 5.42%, respectively. In 2020, the company's current ratio and quick ratio have increased significantly, and the asset-liability ratio has declined, mainly due to the company's 2020 IPO year-on-year increase in monetary funds by 306.87% year-on-year.
The company's operating cash flow showed an upward trend. From 2018 to 2020, the Company's net cash flow from operating activities was 0.39 billion, 0.56 billion and 81 million, respectively. In 2020, the net cash flow from operating activities increased by 44.85% over the same period of the previous year, mainly due to the expansion of the company's sales scale, the increase in capital inflows, and the decrease in procurement payments. The company's cash balance at the end of 2020 is 340 million yuan, and the monetary funds are sufficient.
<h1 class="pgc-h-arrow-right" data-track="22" > Second, the prospects of the scientific service industry are good, and the process of domestic substitution is expected to accelerate</h1>
Aladdin's scientific service industry is a service industry that provides scientific service technology solutions for enterprises, universities and research institutions engaged in scientific research and production quality control, providing design, construction, operation, maintenance, upgrading, transformation and informatization.
(1) The scale of scientific service industry exceeds 100 billion, and the reagent market space is vast
As a key industry serving the national innovation-driven, transformation and upgrading strategy, the scientific service industry has been highly valued by the state. On the one hand, the development of the scientific service industry can promote its more effective service to scientific and technological innovation, play a "catalyst" role, focus on solving the problems of dispersed, closed, and redundant construction of China's scientific and technological resource allocation, stimulate the driving force for innovation, and promote the deep integration of science and technology with the economy; on the other hand, as a new growth point of the modern service industry, it is conducive to improving the main body of the market, expanding market space, helping China's economic transformation and upgrading, and promoting the economy to move toward the middle and high-end level. The development of the scientific service industry plays an important supporting role in national scientific and technological innovation, and has now become an indispensable pioneer industry for the world's scientific and technological and economic development, and its development marks the level of a country's economic and technological development to a certain extent.
With the support of national policies, China's R&D investment has grown rapidly in recent years. According to data released by the National Bureau of Statistics, the expenditure on research and experimental development (R&D) in 2020 was 2,442.6 billion yuan, an increase of 10.3% over the previous year, and the ratio of gdp to domestic production was 2.4%. At present, China's total R&D funding ranks second in the world, after the United States. From 2000 to 2020, China's R&D funding increased by 26.27 times, with an average annual compound growth rate of 17.97%, while the United States only increased by 1.44 times, with an average annual compound growth rate of 4.57%. We believe that China's R&D expenditure will continue to grow at a high speed in the future, and will also drive the further expansion of the capacity of the scientific services market.
The scale of China's scientific service industry market has exceeded 100 billion. With the increase in the expenditure of national scientific research funds, the downstream demand is also increasing.
In terms of government-affiliated research institutions and universities, according to the research group of the "Current Situation, Problems and Countermeasures of domestic experimental reagent supply chain", the expenditure on scientific research reagents and consumables accounts for about 20%-25% of the R&D expenditure of universities and government-affiliated research institutions (using the median 22.5% as the data of subsequent scale estimation). Assuming that these data do not change in 2020, the expenditure on scientific reagents and consumables of government-affiliated research institutions and colleges and universities in 2020 will be about 129.1 billion yuan.
In terms of corporate expenditure, we calculate by splitting the research and development expenses of downstream enterprises in the scientific service industry. In 2020, the proportion of reagents and consumables of pharmaceutical companies Zejing Pharmaceutical, Kangtai Biologics and Microchip Biologics to R&D expenses was 10.9%, 16.2% and 5.1% respectively, and the expenditure of chemical companies Sinochem International, Xinnong Shares and Lier Chemical accounted for 3.9%, 5.8% and 12.7%, and the average of 6 enterprises was 9.1%. Combined with the comprehensive consideration of reagents and consumables needs in other industries, we estimate that the proportion of test agent and consumables expenditure of domestic enterprises in R&D expenses is about 8%. Since enterprises account for 76.4% of the total R&D expenditure (provided that there is no change in 2020), we infer that the expenditure on scientific research reagents and consumables in 2020 will be about 149.3 billion yuan.
It is concluded that in 2020, the total size of the domestic scientific research reagent and consumables market is about 278.4 billion. According to Statista's forecast, China's GDP will reach 135.71 trillion yuan in 2025, when if the proportion of R&D funding increases to 2.8%, then China's scientific research reagents and consumables market size will exceed 400 billion.
Chemical reagents are relative reference materials for chemical research and composition analysis, and are widely used in the synthesis, separation, qualitative and quantitative analysis of substances. There are many methods for classifying chemical reagents, which can be divided into solid reagents and liquid reagents according to the state; according to the purpose, they can be divided into general reagents and special reagents; according to the category, they can be divided into inorganic reagents and organic reagents; and according to the performance, they can be divided into dangerous reagents, non-dangerous reagents, and so on. Chemical reagents are widely used in all walks of life in the national economy such as industry, agriculture, medical and health, biotechnology, inspection and quarantine, national defense and military industry, and play an important role in advanced manufacturing fields such as electronics, microelectronics, aerospace, new materials, and biomedicine.
At present, domestic instrument analysis reagents, special reagents, electronic information industry special scientific research reagents and biochemical reagents are still related to the reagents produced by European and American enterprises have a certain gap, especially in high-end reagents, the current market gap is larger, mainly relying on imports. According to the data of the New Thinking Industry Research Center, the scale of China's chemical reagent market in 2018 was about 124.317 billion yuan, and the average annual compound growth rate of 2018-2024 is expected to be about 12.32%, which is estimated that the chemical reagent market size in China in 2020 will be about 156.8 billion yuan. According to data from Zhiyan Consulting and China Petroleum and Chemical Industry Federation, China's chemical reagent production in 2020 was 28.242 million tons, an increase of 19.6% year-on-year.
(2) International giants monopolize the market, and mergers and acquisitions drive rapid growth
1. Industry competition pattern: foreign capital dominates the market
The world science service market is basically monopolized by international giants, the domestic science service industry is mainly occupied by well-known foreign enterprises, and foreign-funded enterprises control more than 90% of the domestic market share. At present, there is still a big gap between Aladdin and international giants such as Thermo Fisher, Danaher and Merck KGaA. In 2020, Thermo Fisher had global revenues of $32,218 million and China revenues of $2,797 million (Aladdin:234 million).
Foreign-funded enterprises have occupied the market through cross-sector mergers and acquisitions and become the world leader in the scientific service industry. Thermo Fisher scientific was formed in 2006 by the merger of Thermo Electron (specializing in laboratory equipment) and Fisher Scientific (strength of reagent consumables services), followed by the acquisition of Life Technologies, FEI, Patheon, etc. in the following decades; Merck KGaA of Germany to acquire Millipore Sigma-Aldrich et al.; Danaher acquired Pall and GE's life sciences division, among others. Through mergers and acquisitions, international giants already have strong financial strength, rich product matrix and global business network.
2. Sigma-Aldrich: The global market leader in scientific reagents
Founded in 1975 by the merger of Sigma Chemicals (mainly for adenosine triphosphate) and Aldrich Chemicals (mainly providing methylnitrosoguanide), Sigma-Aldrich Corporation (Sigma Aldrich Corporation) is a high-tech multinational company in the field of life sciences and chemistry, the world's largest manufacturer and supplier of chemical/biological reagents, and an experimental partner for many scientists and technicians around the world. Its biochemical, organic chemistry reagents and kits are widely used in genomics, proteome research, biotechnology, pharmaceuticals, disease diagnosis and chemical production, with about 250,000 products, serving more than one million customers worldwide. The company is committed to providing high-end science and technology and products, with excellent quality and excellent service, to accelerate the pace of success of researchers. In September 2014, Sigma-Aldrich was acquired by Merck KGaA for $17 billion as part of Merck's life sciences business.
Since its inception, Sigma-Aldrich has been committed to the scientific work of chemists and biologists, and after decades of accumulation, it has gradually formed a complete product matrix. Sigma-Aldrich is divided into three business units: Research, Applications and SAFC Commercial. Among them, the research department accounts for the largest proportion of operating income, about 50%, mainly for life sciences and non-profit research institutions to provide reagents and consumables, designed to assist scientists in the discovery and development of new drugs and new materials, the business includes chemicals, reagents and kits products and services; the application department aims to provide clinical and industrial applications of diagnostic companies, test laboratories and industrial customers with customized solutions, the construction of key components and raw materials, the business includes kits and their components, chemical reagents, Products and services for key raw materials and certified reference standards.
As Sigma-Aldrich grew, it continued to tap into the needs of its customers and gradually expand its business scope. While developing new products, the company also seized the opportunity to carry out many mergers and acquisitions, organically integrated internal and external resources, and became a leader in the field of scientific research reagents. Sigma-Aldrich's business has always revolved around scientific services, with the continuous enhancement of chemical and biological reagent varieties as the main line, while establishing production and testing services to fully meet the diverse needs of scientific research customers, covering analytical chromatography, isotope labeling, DNA synthesis, compound design software, chemical and biological CDMO, etc.
(3) The rise of domestic scientific research reagent enterprises, domestic substitution is the right time
With the development of China's economy and technology, a large number of scientific service innovation enterprises have emerged in China. Due to the late start of China's scientific service industry, high-end products are basically monopolized by international giants, and domestic enterprises compete fiercely in the low-end field. At present, the number of domestic manufacturers is relatively large, but the vast majority of enterprises are small in scale, single in variety, and low-end in products, and are in the initial stage, and have not yet formed large-scale enterprises with monopoly positions. With the proposal of "Made in China 2025" and "Seven Strategic Emerging Industries", the downstream market for high-end reagents is becoming more and more open, and domestic substitution is expected to accelerate in the future.
In the industry, Titan Technology is a one-stop laboratory product and supporting service provider, the main scientific research reagents, special chemicals, scientific research instruments and consumables, laboratory construction and information services, the use of "independent + agent" product model, its independent high-end reagent products and the company's product benchmarking; Yaoshi Technology is an innovative chemical product and service provider in the field of global drug research and development, the main products are molecular blocks, which coincide with the company's high-end chemical reagents under the synthetic block products; Nanjing test Agent is a high-tech enterprise specializing in the research and development, production and sales of various types of chemical reagents, mainly engaged in scientific research reagents, catalysts and auxiliaries, pharmaceutical excipients and customized chemicals, the current independent product categories of more than 8,000 kinds; Sinopharm reagents is a large domestic laboratory product and service suppliers, the main chemical reagents, experimental consumables, instruments and equipment, experimental furniture, independent brands and third-party brands. Aladdin is a domestic independent high-end scientific research reagent manufacturer, the current variety of reagent products, scientific research reagents in the stock of more than 33,000 kinds of products, has always focused on the development and production of its own brand products.
<h1 class="pgc-h-arrow-right" data-track="47" > three years of deep ploughing in the industry, becoming the industry's first-class scientific research reagent manufacturers</h1>
(1) Products: Scientific research reagents are abundant, and experimental consumables are sold at the same time
1. Scientific research reagents
The company is committed to the research and development and production of scientific research reagents required by the national strategic emerging industries, and its products mainly cover the four major fields of high-end chemistry, life science, analytical chromatography and material science, forming its own reagent brand "Aladdin" series of products. At present, the company's scientific research reagents have more than 33,000 kinds of products in stock, which is one of the most abundant manufacturers in China.
(1) High-end chemistry
In terms of high-end chemical reagents, the company specializes in medicinal chemistry, organic chemistry, chemical biology and other fields, and has more than 22,000 kinds of chemical reagents in stock. High-end chemistry is the company's main business, to medicinal chemistry as an example, the company's synthetic block products are one of the important drug compounds required for the development of new drugs, with a variety of structure, research and development difficulties, high synthesis process requirements, the company uses its own master of thick ring aromatic hydrocarbon synthesis, heterocyclic molecular structure-oriented synthesis, tandem reaction synthesis and chiral reagent asymmetric synthesis and other technologies to prepare more than 12,000 kinds of structural novel, unique function of organic blocks, heterocyclic blocks and other modular block products. New drug research and development institutions use the company's synthetic blocks to synthesize emerging compounds and lead compounds, which can quickly build new drug compounds, greatly saving research and development time and providing great convenience for its screening of new drugs.
(2) Life sciences
Life science reagents are mainly used to study the chemical reactions and interactions that occur in living organisms, and are used to study the structure and function of proteins, carbohydrates, lipids, nucleic acids and other biomolecules in cells, and are also widely used to study the chemical properties and enzymatic reactions of proteins. Reagents play an important role in promoting the development of the field of biology. For example, in the field of biopharmaceutical research and development, biochemical reagents such as siRNA and antibodies affect drug targets, and although they cannot be used as drugs, they are often the starting point for drug discovery. The company is currently able to offer more than 4,800 life science test products that are widely used in genomics, proteomics, metabolomics, glycomics and other research fields.
(3) Analytical chromatography
Analytical chromatography is used to analyze the composition and structure of substances, qualitatively or quantitatively analyze the composition of chemical substances, and determine the structure of analytes. Analytical chromatography reagents are application reagents in the packing, standard, or feature display categories.
The company focuses on the development of China's shortage of organic standards and standard solutions and other analytical chromatography reagents, currently can provide more than 4,000 analytical chromatography products, mainly used for quality analysis of a variety of applications and provide accurate test results, including liquid and gas chromatography analysis, mass spectrometry, Karl Fischer titration, elemental trace analysis, classical analysis, pharmaceutical analysis, environmental and air monitoring, food and beverage analysis, etc.
(4) Materials science
Materials science is the study of the interrelationship between the preparation method, processing technology, microstructure and macroscopic properties of materials. Materials science reagents focus on the synthesis and preparation of new materials, the modification of materials and the collection of new materials, providing research and development materials for scientific research activities.
Focusing on the synthesis, preparation, modification and collection of new materials such as organic polymer materials and nanocomposites, the company currently offers more than 1,800 materials science products that are widely used in research and development in the fields of semiconductors and chips, aerospace, future biotechnology, multifunctional biosensors and new energy.
In 2020, the company's main business in the high-end reagents accounted for the highest proportion, accounting for about 53% of the main business income, followed by life science reagents, accounting for about 23%. Since the new crown epidemic, the biopharmaceutical industry has accelerated its development, coupled with the rapid development of life science research fields such as genetic engineering, proteomics and molecular biology in the industry, and the downstream demand for biological reagents has rapidly expanded, so the company will also vigorously develop life science reagents in the future.
Some of the reagent products independently developed by the company have reached the domestic leading or international advanced level, and to a certain extent, they have realized national substitution. The vast majority of scientific research institutes have higher requirements for the quality of reagents, if the quality of scientific research reagents can be comparable to foreign reagents, while ensuring a certain price advantage, the future can accelerate the localization of substitution and enhance the company's market share.
The company benchmarks the international leader Sigma-Aldrich in product categories, and the two scientific research reagent product lines cover four categories of high-end chemistry, life science, analytical chromatography and materials science, and are equipped with a small number of experimental consumables. At present, the company still has a big gap with Sigma-Aldrich in terms of product scale, revenue scale and customer scale. Sigma-Aldrich has nearly 250,000 scientific research reagents and more than 1 million customers worldwide, while the company only has more than 33,000 kinds of goods in stock, with about 150,000 customers, and there is also a certain gap in product quality and product variety. In the future, the company will continue to focus on new product research and development, with the improvement of technical level and product scale, the gap between the company and overseas leading enterprises will gradually narrow, is expected to broaden the business to foreign markets, become the world's leading manufacturer of high-end scientific research reagents.
2. OEM production consumables to provide convenient procurement experience
On the basis of years of experience in research and development, production and sales in the field of scientific research reagents, the company launched the "Core Silicon Valley" brand experimental consumables as a supporting product for reagent products in 2015, entrusting OEM manufacturers to produce (some products are designed and developed by the company and applied for relevant patents), providing customers with a one-stop convenient procurement experience.
The company currently provides more than 1,300 kinds of experimental consumables, including safety protection (protective clothing, masks, gloves, goggles, etc.), glassware, instruments and tools, chromatography consumables and cell factories, which are complementary to the company's reagent products. The company's experimental consumables all adopt OEM production methods, the production links are mainly packaging, inspection, labeling, laminating and other simple processes, experimental consumables main business costs of direct materials accounted for more than 95%, direct labor and manufacturing costs accounted for low, in line with the company's experimental consumables production characteristics.
3. Improve quality inspection and fully ensure product quality
At present, the company has established a quality standard system suitable for R&D and production, and has completed the formulation of more than 43,000 enterprise product standards, and has continued to comply with ISO9001 quality management system certification since 2012. The company has compiled standard operating procedures (SOPs) for product production and testing, and quality records run through the entire product life cycle. In the procurement process, the analysis and testing department in the reagent raw materials and OEM experimental consumables in strict accordance with the technical indicators before the storage of testing, the unqualified products feedback to the procurement department for return and replacement processing, from the source to ensure the quality of the company's products; in the production process, the analysis and testing department in the finished products before the warehouse to carry out strict quality inspection, unqualified products returned to the production department rework; in the sales link, the analysis and testing department for each qualified product equipped with COA quality inspection certificate, chemical research reagents are also equipped with MSDS safety operation instructions, easy for customers to operate, use. The strong quality inspection ability has laid a good foundation for the long-term stability of the company's product quality.
(2) Research and development: independent research and development investment is large, and the technical level is high
As a technology pioneer enterprise, the company attaches great importance to research and development and technological innovation, in recent years has maintained a high R & D investment, set up more than 3,000m2 R & D center, equipped with professional and technical personnel and advanced instruments and equipment, forming a good scientific research environment. The core strength of the R&D center is composed of professional and technical personnel in the scientific research reagent industry, focusing on the research and development of products in the four major fields of high-end chemistry, life science, materials science and analytical chromatography.
1. R&D is guided by product demand and vigorously develops life sciences
The company's product users are mainly scientists and R & D engineers, their research topics are different, the reagents required are very different, the company can quickly grasp the needs of users through the e-commerce platform, and provide direction for new product research and development. At the same time, the company's product development department aims at the international frontier hot areas, closely follows the trend of scientific research and innovation, judges the development direction of scientific research reagents, and develops new reagents required by scientists and engineers in real time to meet the product needs of downstream users.
The company's research and development has always been to have a clear market demand for products as the guide, to catch up with the international leading level, to achieve import substitution for the purpose, in the next period of time, the company will accelerate the construction of R & D center, increase investment in R & D instruments and equipment, increase high-level talent reserves, R & D focus will be to life sciences, material science and other functional reagent products tilted.
(1) R&D management system
The company continues to improve the technology research and development management system, the R & D center post responsibility management system, confidentiality system, experimental code of conduct, laboratory safety codes, laboratory management system, etc., R & D center under the technology research and development department, product development department, method development department and reference materials development department, the formation of a sound R & D system. The company adopts the method of equity incentive for the backbone of R&D to maintain the stability of the core R&D team, provide a good working environment, scientific research resources and development space for R&D personnel, and formulate special incentives to motivate R&D personnel to carry out technological innovation. In addition, the company continues to introduce professional talents, inject fresh blood into the R & D team, pay attention to the cultivation of R & D talents, and sign confidentiality agreements and non-compete agreements with core technical personnel to strengthen the protection of proprietary technology. The company continues to increase investment in research and development, and the proportion of research and development investment in the main business income has always remained above 7%, laying a solid material foundation for the company's technological innovation.
(2) R&D focus
The company's product development department has always focused on the fields of synthetic chemistry, life science, materials science and analytical science, consulting relevant domestic and foreign literature, investigating domestic and foreign scientific and technological development trends and innovation hotspots, such as cancer inhibitors, silicon-based materials, AI sensor materials, etc., collecting and analyzing product information of international competitors, evaluating the development trend of scientific research reagents every year, and determining the company's annual proposed varieties. The technology research and development department will also develop products that are scarce in the market according to the characteristics of the industry. In addition, when customers put forward new product requirements, it will also trigger the company's technical research and development.
The company's planning department uniformly arranges the R & D plan, passes it to the technology R & D department through the process, the technology R & D department receives the R & D task after the R & D project, through the approval of the search for domestic and foreign literature, product formula design and process route development, while the method development department on the analysis method research and development, the formula, process route and analysis method formed after successful development into the system for subsequent production and use and further optimization, upgrading.
Life sciences have become the most important natural and applied sciences of the 21st century, proteomics has entered a booming era, playing a major role in explaining genes, and as people understand proteins more and more deeply, biopharmaceuticals will enter the "fast lane" of development. The company will strengthen the integration of superior resources, continuously extend the industrial chain while further improving the reagent product line, focus on the development of reagents for life science research, and accelerate the construction of a rich variety of biologically active recombinant protein libraries and antibody libraries, providing them to scientists and front-line researchers, forging new profit growth points.
2. Attach importance to the training of R&D personnel and continue to increase talent reserves
The company's R&D center consists of four departments: technology research and development department, method development department, reference material development department and product development department. Among them, the technology research and development department is responsible for the development of scientific research reagent formulas and processes; the method development department is responsible for the development of analytical methods; the reference material development department is responsible for the research and development of reference materials; the product development department is responsible for the determination of annual varieties to be developed and the development of customized suppliers of reagent raw materials.
Based on the needs of future development, the company further increases the strength of talent reserves. On the one hand, the company will recruit professional talents in a targeted manner according to the functions of different departments, continue to expand the proportion of R & D personnel, and maintain the company's advantages in technology research and development. On the other hand, the company will increase compound marketing talents with professional knowledge to serve customers accurately and efficiently. In addition, the company will focus on cultivating management talents and technical backbones, establish a talent echelon, improve the talent structure, and reserve strength for the company's long-term development. Training is an important way to integrate enterprise talent resources, the future company will strengthen the construction of the existing training system, for employees in different positions to develop scientific training plans; according to the company's development needs and employees' personal wishes, the development of corresponding career planning; the use of internal exchange courses, external experts to teach and leading enterprises to visit and other training methods to improve employee skills. The company will greatly improve the overall quality of employees by strengthening talent training, promote the staff team to further adapt to the pace of rapid development of the company, and enhance corporate culture and refined management capabilities.
Variety innovation is the eternal theme of the scientific research reagent industry, the company has adhered to the independent research and development route since its establishment, attached importance to technological innovation, set up an area of more than 3,000 square meters of scientific research reagent research and development center, to create a core R & D team of more than 70 people, R & D personnel accounted for more than 20% of the company's total number of employees. Ling Qing, the company's core technology leader, has nearly 20 years of R&D experience, and was once an organic synthesis researcher of Shanghai WuXi AppTec New Drug Development Co., Ltd., a senior researcher and laboratory director of Jie Dawei (Shanghai) Pharmaceutical Technology Development Co., Ltd., and a research and development supervisor of Wuxi Linuokang Pharmaceutical Technology Co., Ltd. In recent years, the company has continuously increased its investment in research and development, and the proportion of research and development expenses in operating income has always remained above 7%, and continuous investment in research and development has laid a good foundation for the company's reagent varieties.
(3) Warehousing: safe and reliable, increase the layout
The company has a Class A warehouse, room temperature warehouse, 2-8 °C cold storage, -20 °C cold storage, raw material warehouse, packaging material warehouse, consumables library. The company can classify and store according to the different storage requirements of different categories of scientific research reagents for temperature, humidity, light and ventilation, and at the same time, meet the special storage requirements of hazardous chemicals such as fireproof, explosion-proof, anti-poisoning, and anti-leakage to ensure product performance. Strong storage capacity to ensure that the company in line with the national security and environmental protection related laws and regulations under the premise of compliant operation, for the company to continue to develop varieties, continue to expand the scale of production provides a reliable guarantee.
The company's revenue mainly comes from East China, North China, South China and other regions. In 2020, the company's total income in East China, South China and North China accounted for 84.4% of the main business income, mainly because on the one hand, the company's R & D and production base is located in Shanghai, Jiangsu, Zhejiang, Shanghai logistics distribution is faster, the after-sales service system is the most perfect; on the other hand, the eastern coastal areas are rich in educational resources, the economic level is developed, with Shanghai as the center, Zhejiang and Jiangsu as the two wings of the Yangtze River Delta region, with Beijing and Tianjin as the center of the Bohai Rim region. The Pearl River Delta region, centered on Guangzhou and Shenzhen, is a gathering place for China's colleges and universities and scientific research institutes, and there are many strategic emerging enterprises in the above regions, and the investment in research and development is ahead of the national average. At present, the company is also stepping up the construction of warehouses in the southwest, central China, northeast and northwest regions.
(4) Sales: Convenient online orders, direct sales
1. Online e-commerce is divided into independent platforms and third-party platforms
(1) Independent e-commerce platform
The company mainly sells products through its own e-commerce platform. In the domestic scientific research reagent enterprise e-commerce platform ranking comparison, the company ranked first in all quarters from 2017 to 2020 (except the third quarter of 2018), with more than 145,000 registered users, and at the same time, the company was also rated as the "most popular reagent brand for users" for 9 consecutive years, establishing a leading position in the field of domestic scientific research reagent e-commerce.
In recent years, the company's independent e-commerce platform SKU, total order number, total order amount, monthly active users, registered users and the company's average user income have increased year by year, which coincides with the continuous expansion of the company's main business income. At the same time, the average order amount has declined, mainly because with the increasing variety of the company's products, the increasing convenience of logistics and distribution, the increasingly frequent purchases from customers to the company, the number of orders continues to rise, and the average order amount has declined. In addition, the company's average user income has gradually increased, mainly due to the increase in the company's sales concentration in recent years, and the proportion of distribution revenue has been rising.
According to the tracking statistics of the reagent information network on the ranking of domestic and foreign scientific research reagent enterprise e-commerce platforms, on the whole, the global ranking of domestic reagent e-commerce platforms led by Aladdin has risen rapidly in recent years. In 2020, the company ranked first in the ranking of domestic scientific research reagent enterprise e-commerce platforms, and in the ranking of the fourth quarter, it has basically caught up with global leading enterprises such as Sigma-Aldrich and Thermo Fisher Scientific, significantly surpassing internationally renowned enterprises such as Merck and Tixie in Germany.
From 2017 to 2019, the sales revenue of the company's independent e-commerce platform was 120 million yuan, 151 million yuan and 186 million yuan respectively, accounting for 95.62%, 92.92% and 91.76% of the main business income, respectively.
(2) Third-party e-commerce platforms
The company sells through third-party e-commerce platforms such as Jingdong Mall, Tmall Mall, Karsma Mall and Neicai Platform, as an effective supplement to the company's independent e-commerce platform. According to whether the third-party e-commerce platform sells to external users, the company divides the sales model of the third-party e-commerce platform into online B2C mode (including Jingdong Mall, Tmall Mall and Karsma Mall) and internal procurement platform model. With the development of the Internet and the need for standardized procurement and transparent management, the internal procurement platform for independent scientific research supplies established by some colleges and universities, scientific research institutes or enterprises and institutions is established. The operation mode of the internal procurement platform is similar to the online B2C mode of the traditional e-commerce platform, the supplier enters the platform in the form of an online store, displays the relevant information of various products in the store, and the internal users of the terminal (internal research groups, branches or R&D personnel) register the account and place orders in each store, and the supplier directly distributes the goods to the terminal internal users after receiving the order. The internal procurement platform is limited to the use of internal personnel of the unit, and the procurement cost is uniformly paid by the financial department of the unit to the supplier.
The company's online B2C model (including Jingdong Mall, Tmall Mall and Karsma Mall) and the internal procurement platform model sales process is basically the same, the end user in the third-party e-commerce platform after placing an order the company's sales staff need to "transcribe" the order, that is, the third-party e-commerce background corresponding to the order information on the company's ERP system EDI data import, follow-up process and the customer on the company's own e-commerce platform to place orders is not significantly different.
Scientific research reagents are highly professional, there are many varieties, coupled with the small amount of scientific research reagents used in units, and the wide distribution of customers, so the company's use of e-commerce sales model has natural advantages.
1) Using the e-commerce platform, customers can carry out detailed screening of goods, and detailed information display can enable customers to compare and verify different categories. And with the upgrading speed of scientific research products, the web page is more efficient in updating and displaying products.
2) Due to the small number and amount of single order purchase of scientific research reagents, the wide distribution area of customers, if the traditional sales model is adopted, it will bring about a surge in sales expenses.
3) Scientific research The user group is generally young and highly educated, and users are more willing to choose a relatively convenient e-commerce sales model.
4) The e-commerce model has fast response speed and high delivery efficiency. Under the e-commerce model, customers can communicate with the platform one-on-one, which is conducive to improving the efficiency of communication.
5) The webpage can more efficiently collect customer demand information, record user shopping habits, track the whole process of customers from ordering to product out of the warehouse, provide customers with convenient services at the same time, analyze customer differentiated product needs, and regularly prepare some best-selling products to ensure timely delivery.
2. "Direct sales + distribution" model, providing personalized services
According to the customer type, the company's customers can be divided into dealers and direct sales customers, of which direct sales customers are divided into traders and end customers, the company selects some high-quality large customers with great growth potential such as WuXi AppTec, Academy of Sciences, Peking University, etc., to provide personalized services and enhance customer stickiness. Thus, the company's end customers can be divided into large customers and other general customers.
The company adopts the sales model of direct sales as the mainstay and distribution as the supplement. The main reasons for the company's adoption of the distribution model are as follows:
1) The company develops distributors in various regions, which can cover the local offline customer group and improve market share.
2) From the perspective of industry competition, at present, the domestic scientific research reagent industry is mainly monopolized by foreign brands, and the main body of the domestic reagent market is mainly the dealer of brand agent, and there are many types of scientific research reagents and consumables, and the R & D personnel have great differences in product and brand appeals, and dealers can bring together a variety of brands of scientific research reagents and experimental consumables for users to choose, to meet the one-stop procurement needs of customers. Through the distribution model, the company can seize customer resources and expand sales revenue.
3) Scientific research reagent dealers generally have relatively stable customer resources. By establishing long-term cooperative relations with high-quality dealers, the company can broaden sales channels and help the company focus on research and development, production and supply chain control, etc., and reduce sales expenses and capital utilization.
(5) User stickiness: many years of user accumulation, price advantage to enhance competitiveness
Through years of technology accumulation and market development, the company has more than 145,000 registered users, accumulated a high-quality, solid, broad customer base, and maintained a good customer stickiness. The company's direct customers include many scientific research institutes, colleges and universities and innovative enterprises, including the Chinese Academy of Sciences, the Chinese Academy of Medical Sciences, the Chinese Academy of Agricultural Sciences, Beijing University, Tsinghua University, Fudan University, Pumen Technology, WuXi AppTec, Yaoshi Technology, etc., covering biomedicine, new materials, new energy, energy conservation and environmental protection, aerospace and other fields.
1. Sell consumables to facilitate one-stop procurement for customers
Scientific research reagents and experimental consumables are regular consumables of scientific research activities, the purchase frequency is high, showing the characteristics of multiple batches and small batches, downstream customers are scattered, the main users are scientific researchers in various fields with research and development needs, colleges and universities, scientific research institutes, rich professional knowledge, belonging to the rational purchase group, strict technical conditions, specifications, uses, etc., high repeat order rate.
Since its inception, the company has been focusing on the research and development, production and sales of scientific research reagent products. With the accumulation of its own technology and the increasing recognition of the "Aladdin" brand market, and in order to meet the needs of customers for one-stop procurement, the company on the one hand through continuous research and development of new varieties of scientific research reagents, expand the product line; on the other hand, the "core Silicon Valley" brand experimental consumables products are launched as a supporting supplement to scientific research reagents to improve the convenience of customer procurement.
2. Benchmark the market price of foreign brands, highlighting the high cost performance
The company's product prices appear in real time on the independent e-commerce platform and third-party e-commerce platforms, with high transparency, in addition to giving some customers a certain sales discount, the price is consistent with the customer.
(1) Pricing strategy of scientific research reagents
First of all, in view of the lack of scientific research reagent products in the domestic market and mainly relying on imports, the company adopts the strategy of following the pricing of foreign brands on the basis of maintaining the high-end brand image of "Aladdin", and through big data mining, timely grasps and targets the market price of major foreign brands in China, formulates product prices lower than that of international giants, highlights higher cost performance, and ensures strong market competitiveness.
Secondly, for some domestic competitors in the same industry can also provide products, the company with excellent product quality and higher brand awareness, set a slightly higher price than the domestic competitors in the same industry, reflecting the company's high-end manufacturing image and good brand premium. In addition, on the basis of the implementation of the above pricing strategy, the company will also dynamically adjust the product price according to changes in market supply and demand and competitor pricing strategies.
(2) Experimental consumables pricing strategy
The company's "core Silicon Valley" brand experimental consumables are complementary products for scientific research reagents, and adopt different pricing strategies from scientific research reagents. Experimental consumables are not the company's core products, in order to facilitate customer one-stop procurement and increase customer stickiness for the purpose, so the product profit margin is lower than the "Aladdin" brand scientific research reagents; in addition, the company will sometimes according to the sales situation and marketing department feedback to a certain range of price adjustments or hold promotional activities, to maintain the flexibility of experimental consumables pricing, enhance the company's market competitiveness.
3. The company focuses on the independent research and development and production of reagents, and wins the trust of customers with professionalism
Since its inception, the company has chosen to focus on the development of its own brands, abandoned the development model of representing foreign brands to rapidly increase sales, and insisted on independently developing new varieties. After more than ten years of accumulation, there are more than 33,000 kinds of scientific research reagents in the standing inventory of products, becoming a scientific research reagent manufacturing enterprise with certain influence in the industry. The core strength of the R&D center is composed of professional and technical personnel in the scientific research and testing industry, and has always focused on the research and development of products in the four major fields of high-end chemistry, life science, materials science and analytical chromatography. In 2020, the revenue of scientific research reagents accounted for 92.67% of the total operating income, and the proportion of scientific research reagents revenue remained above 90% all year round.
4. The company provides professional and efficient services
The essence of the scientific service industry is "service"; high-quality service can gain the trust of customers and enhance their loyalty to the company's brand. The company uses e-commerce sales methods to facilitate all-round and high-precision matching of customer needs and improve customer experience. In addition, the company ships in a timely manner and logistics is efficient, and usually the customer only takes 3 days from order to receipt. The convenient shopping experience has won the praise of customers and formed a good market reputation.
5. Customers bring brand reputation from universities to enterprises and other customers
The company's downstream customers cover many domestic universities, scientific research institutions and R & D enterprises; college students in the scientific research activities to contact the company's many products, feel the company's quality services, in the future into the workplace, can continue to choose the company's products and the company's brand reputation spread to the enterprise, enhance the company's visibility in the downstream enterprises.
6. The first-mover advantage ensures the trust and loyalty of the brand
Unlike other industries, research customers show great loyalty to the brand, win the first impression of customers, and thus take advantage of the first mover. As one of the earliest companies to enter the industry, in the early days when the choice of brands was very limited, customers used the company's products and services, enjoyed a satisfactory customer experience, that is, maintained trust and loyalty to the brand, these customers are difficult to obtain by other brands.
On the other hand, most of the scientific research results achieved by scientific research customers in the use of reagent products will be published in professional academic journals for global sharing, and new customers will often choose the brand products used in the literature to avoid experimental failure due to product quality when choosing products, which will play an invisible role in publicizing the company's products.
(This article is for informational purposes only and does not represent any of our investment advice.) For usage information, see the original report. ）
Source of the featured report: [Future Think Tank official website].