Guosen: The in vitro diagnostic production line is the "crown jewel" of the IVD industry. Domestic companies will usher in a golden development period.

Guosen released a research report stating that the clinical laboratory of tertiary hospitals is the main user of automated immunoassay systems, while the demand for installation in secondary hospitals and independent clinical laboratories (ICL) is gradually increasing. Foreign enterprises, with their first-mover advantage and closed-system design, have captured a large share of the market in tertiary hospitals. In recent years, as domestic enterprises have made continuous breakthroughs in high-speed chemiluminescence, high-speed biochemistry, and in-house production lines, the purchasing cost of automated immunoassay systems has significantly decreased. As a result, secondary hospitals are expected to become the main battleground for the installation of domestically produced automated immunoassay systems in the next 3-5 years. In the context of centralized procurement, having cost-effective and high-quality products will become the core competitiveness for in vitro diagnostics (IVD) companies, and automated immunoassay systems can build a moat around reagent procurement. Companies that have a complete reagent menu, in-house production lines, and major high-cost modules like high-speed chemiluminescence and high-speed biochemistry are expected to stand out in future competitions. Automated immunoassay systems are considered the "pearl on the crown" of the IVD industry, and domestic companies are expected to enter a golden development period in the next 3 years. Tertiary hospitals are the main users of automated immunoassay systems, while the demand for installation in secondary hospitals and ICL is gradually increasing. By the end of 2023, there are approximately 3,000 automated immunoassay systems in China, with more than 80% of them being brands such as Roche, Abbott, Beckman, Siemens, and Hitachi. In recent years, domestic companies have made breakthroughs in high-speed chemiluminescence, high-speed biochemistry, and in-house production lines, leading to a significant decrease in the purchasing cost of automated immunoassay systems. The demand for installation in secondary hospitals is expected to be the main focus for domestically produced automated immunoassay systems in the next 3-5 years. Based on Guosen's calculations of the demand and market size for automated immunoassay systems in different-level hospitals and ICL labs, it is estimated that the space for domestic installations ranges from 8,919 to 12,738 units; by 2030, the annual output of biochemical and immunological reagents brought by domestic automated immunoassay systems will be around 11.4 billion RMB. Chinese brands entered the automated immunoassay system market relatively late, but have made continuous breakthroughs in recent years. In October 2001, the First Affiliated Hospital of Zhejiang University introduced a Hitachi automated immunoassay system, marking the entry of automated laboratory systems into the domestic market. Until 2018, the demand for automated immunoassay system installations in China was dominated by imported brands. In 2018, Autobio Diagnostics introduced the first domestically produced TLA system, marking the entry of Chinese brands into the IVD automated immunoassay system market. In the past two years, leading domestic IVD companies have been continuously updating their automated immunoassay system solutions and have shown initial competitiveness in the high-end market, with domestic installations speeding up. In 2023, nearly half of the new installations in China are from domestic brands. As of the first half of 2024, Mindray has become the top Chinese brand in terms of installations, with a market share comparable to Abbott; Autobio Diagnostics, ShenZhen New Industries Biomedical Engineering, Shenzhen YHLO Biotech, and Maccura Biotechnology closely follow suit. After the implementation of centralized procurement, the landscape of the IVD industry has changed, with automated immunoassay systems becoming a fiercely competitive area. By September 2024, 89 biochemical reagent projects have been included in centralized procurement, with a coverage rate of over 90%; and 89 projects in five major immunological reagent categories have also been included in centralized procurement, with a coverage rate of over 50%. In the context of centralized procurement, having cost-effective and high-quality TLA products will become the core competitiveness for IVD companies, and automated immunoassay systems can create a barrier to reagent procurement, which will have a certain guiding significance for hospitals in the procurement process. Guosen believes that companies with a complete reagent menu, in-house production lines, and major high-cost modules like high-speed chemiluminescence and high-speed biochemistry will stand out in future competitions. Chinese automated immunoassay systems are flourishing, and attention should be paid to the differentiation of competitive advantages among various companies. Guosen believes that the performance, cost, sales policies, and services of equipment and complementary reagents are all factors that determine a hospital's choice of automated immunoassay system brands. Over the past 20 years, Chinese companies have gradually achieved domestic substitution for biochemical reagents and medium-speed biochemistry instruments, and have caught up with or even surpassed imported companies in terms of the variety and performance of chemiluminescence reagents. The 2000-speed biochemical analyzer represents the ceiling for IVD instruments, with Shenzhen Mindray Bio-Medical Electronics, Dirui Industrial, Autobio Diagnostics, and Maccura Biotechnology all obtaining approval for their 2000-speed biochemical analyzers. In addition to performance, Chinese companies also have competitive advantages in terms of cost, sales, and service. Recommended leading Chinese automated immunoassay system companies to watch include Shenzhen Mindray Bio-Medical Electronics (300760.SZ), Autobio Diagnostics (603658.SH), ShenZhen New Industries Biomedical Engineering (300832.SZ), Shenzhen YHLO Biotech (688575.SH), and Maccura Biotechnology (300463.SZ). Risks include the risk of R&D failure, patent risk, industry competition risk, risks of price reductions in centralized reagent procurement exceeding expectations, and risks of automated immunoassay system tendering falling short of expectations.