Mega Genomics (6667) H1 2023 earnings summary

Executive summary

• H1 2023 revenue was RMB98.879m, up 1.3% YoY; net profit rose 97.3% to RMB35.117m, partly supported by a RMB10.411m trade-receivable impairment reversal.

• Consumer genetic-testing growth and improved margins offset lower cancer-screening revenue following promotional pricing.

• More than 17m cumulative tests had been performed since 2016; average monthly testing volume exceeded 180,000 in H1 2023.

Financial highlights

• Revenue was RMB98.879m, up 1.3% YoY; gross profit was RMB65.299m, up 1.4%, with gross margin unchanged at 66.0%.

• Net profit was RMB35.117m, up 97.3%; profit before tax was RMB42.302m versus RMB20.781m.

• Other income and gains rose 103.0% to RMB7.753m, mainly from government grants and higher wealth-management income.

• Basic and diluted EPS were RMB0.16, versus basic EPS of RMB0.09 in H1 2022.

Outlook and guidance

• Priorities included expanding consumer testing and distribution, upgrading products, developing industry standards with experts, and educating medical institutions.

• Plans included accelerating digestive-cancer blood-methylation R&D, automating production to reduce costs, and broadening cancer-screening products, including lower-cost fecal occult blood testing.

• Colorectal and gastric cancer qPCR kit registrations were targeted by 2024; ApoE and folate assessment kits targeted H1 2024 registration, and Alzheimer's RT-qPCR kits 2025.

• Plans included recruiting R&D specialists, developing lower-cost home testing, building a manufacturing laboratory, and selectively pursuing complementary acquisitions.