(Yicai Global) April 26 -- Lepu Medical Technology, one of the first Chinese firms to export its Covid-19 testing kits during the pandemic, recorded declines in sales and profit in the first quarter as product prices dropped.

Revenue declined by 7 percent to CNY2.6 billion (USD388.9 million) in the first quarter from a year ago, the Beijing-based medical equipment manufacturer said in its earnings report released yesterday. The main reason was the high base of last year and the cut in antigen reagent product prices in China due to centralized procurement. Net profit fell 25 percent to CNY550 million (USD83.9 million).

A closer look into revenue streams proved the point. Income coming from Covid reagents plunged nearly 80 percent to CNY130 million from a year earlier.

Offshore sales are becoming increasingly important to the firm. Lepu's antibody test kits, used to detect whether a person has Covid, and its antigen detection reagents were approved to enter the European market in March 2020 and November 2020, respectively.

In 2021, the firm boosted its revenue by 33 perched to CNY10.7 billion (USD1.6 billion) from 2020. Overseas revenue more than doubled to CNY3.8 billion, making up 35 percent of the total, versus less than a fifth in 2020. However, net profit declined by 5 percent to CNY1.7 billion due to nonrecurring losses of CNY135 million, caused by fluctuations in Junshi Biosciences' share price.

Lepu's drug business is shrinking. Such revenue has fallen in the past two straight years due to China's centralized procurement and the impact of the pandemic. Last year, drug sales dropped 5 percent to CNY3.3 billion, accounting for 31 percent of the total.

Still, Lepu is doubling down on innovation. It spent CNY1.1 billion on research and development last year, rising 38 percent from 2020.

Lepu's stock price [SHE: 300003] was 1.5 percent up at CNY17.29 (USD2.70) in the afternoon.

Editor: Emmi Laine, Xiao Yi