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On October 31, MGI (688114.SH) held an online briefing on the results of the third quarter of 2024. The company's management attended the meeting, interpreted the company's performance in the first three quarters in detail, and looked forward to the future business development.
In the first three quarters of 2024, the company achieved an overall operating income of 1.869 billion yuan, a comprehensive gross profit margin of 61%, and a net profit loss attributable to the parent company of 463 million yuan. As for the reasons for the loss, the company's management explained that on the one hand, it was affected by the macro environment, geopolitics and market competition, which led to a decline in gross profit contribution; At the same time, the company's overseas regions are still in the investment period, the scale of revenue has not yet opened, and the cost of overseas regional sales expansion in the early stage continues to increase; In addition, the construction of international marketing outlets and the completion and commissioning of infrastructure projects have led to an increase in fixed costs; Finally, the company adheres to the independent and controllable core technology, continues to promote product innovation and iteration, and constantly consolidates the strategic layout of patents, and high R&D also sacrifices profits to a certain extent, with R&D investment of up to 590 million yuan in the first three quarters, accounting for 31.6% of operating income.
However, at the core business level, MGI continued to promote strategic planning, and the gene sequencer business still showed a steady growth trend, achieving revenue of 1.54 billion yuan from January to September, and the cumulative sales installed capacity exceeded 670 units, a year-on-year increase of 4%. As of the end of September, MGI has sold nearly 4,000 installed units. Among them, DNBSEQ-G99 and DNBSEQ-E25 are positioned as small and medium-throughput sequencers, which have promoted the widespread use of gene sequencers in clinical and emerging application fields, and the sales installed capacity has surged, reaching 210 and 93 units respectively in the first three quarters, a year-on-year increase of 33% and 564%. IT IS WORTH MENTIONING THAT WITH THE GROWTH OF THE CUMULATIVE INSTALLED CAPACITY OF DNBSEQ-T7, THE CONSUMPTION OF DNBSEQ-T7 SEQUENCING REAGENTS HAS MAINTAINED A CONTINUOUS GROWTH TREND, ACHIEVING REVENUE OF 450 MILLION YUAN IN THE FIRST THREE QUARTERS OF 2024, A YEAR-ON-YEAR INCREASE OF 19%.
Management said that the number of new equipment sold in the first three quarters of the company still increased by 4% compared with the same period last year, and the share of new sequencers in China has also increased compared with 2023. With the successive launch of external policies including trade-in, localized hospital capacity building, as well as demand for clinical testing, development of new scientific research technologies, and incubation of emerging application fields, the company's gene sequencer business will jointly promote the continuous growth of the company's gene sequencer business.
In terms of market and customer expansion, MGI has also established long-term and stable cooperative relations with strategic cooperative customers and channel providers, and as of the end of the third quarter, the company's orders in hand reached 820 million yuan. In the domestic market, the company has established good cooperative relations with enterprises in clinical application fields such as Geyinga, Beikang Medical, Golden Key Medical, Shihe Gene, as well as scientific and technological service companies such as Nuohe Zhiyuan and Xuzhenda Biotechnology. In the international market, we can still see that heavyweight scientific research institutes and industrial customers in the United States and Europe choose to use the company's products, and the company firmly believes that the core competitiveness of products will be the ultimate guide of market selection. The company expects that its overseas business will maintain a certain percentage of growth in 2025 compared to 2024, especially with the opening of the company's global DCS Lab and customer experience center, which will provide a more convenient, intuitive and high-quality experience for overseas users.
Looking ahead, MGI said that MGI will further consolidate its underlying core competitiveness, focusing on improving the industrial stability and production stability of its products to cope with the arrival of artificial intelligence and automation. At the same time, the company will continue to focus on product innovation and meet customer needs, make breakthroughs in the throughput, cost and speed competitiveness of sequencing products, and further exercise its internal strength in the development of the whole chain.
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