Huaan: The fourth generation of sequencing opens the era of large-scale applications, and the application of AI big models will become a key competitive advantage.

Huaan released a research report stating that the size of China's gene sequencing market is expected to exceed 150 billion yuan by 2030, becoming one of the fastest developing and most advanced directions in the field of in vitro diagnostics. Gene sequencing technology is evolving from being used in scientific research and medical diagnostics to a precise medical ecosystem led by biological computing and synthetic biology. Although international manufacturers have a technical advantage in the high-throughput sequencing (NGS) field, the process of domestic substitution is expected to accelerate with the breakthrough of fourth-generation sequencing technology. The application of AI large models in gene data processing will also become a key factor in enterprise competitiveness. Key points from Huaan are as follows: The size of China's gene sequencing market is expected to exceed 150 billion yuan by 2030, making it the fastest developing and most advanced direction in the field of in vitro diagnostics. Gene sequencing was initially used in scientific research and medical diagnostics, but its final commercial form will be a precise medical ecosystem led by biological computing and synthetic biology. Due to the technology barriers and reagent consumption models of high-throughput sequencing (NGS) platforms, international manufacturers have patented technology and first-mover advantages. Even though domestic sequencing instruments and reagents have cost advantages, full replacement is difficult to achieve in the short term. As technology continues to break through, the cost-effectiveness of gene sequencing is constantly increasing, and its applications are gradually expanding. Currently, led by ONT, the world has developed to the fourth generation of gene sequencing, and the key to driving the transformation of the gene sequencing industry lies in technological breakthroughs, with fourth-generation sequencing technology becoming an important direction for development. Compared to NGS, which mainly relies on short reads and long splicing, fourth-generation sequencing technology features ultra-long reads, real-time monitoring, and no need for PCR amplification. It demonstrates unique advantages in detecting structural variations, epigenetic modifications, and real-time clinical diagnosis. With the reduction in sequencing instrument costs, improvement in computing capabilities, and optimization of bioinformatics algorithms, fourth-generation sequencing technology is expected to be widely applied in the next five to ten years, ushering in a new development stage for precise medical treatment. The processing and analysis of massive gene data cannot be separated from the participation of AI large models. With the emergence of deepseek, specific domain-use vertical AI large models will appear in the medical field in the future, such as AI biological models similar to Evo2. There is a large amount of unlabeled data in public databases. How enterprises make use of public information, high-quality labeling of clinical data, and the ability to optimize algorithms will become the strongest competitiveness for enterprises. Related companies: BGI Genomics (300676.SZ), Berry Genomics (000710.SZ), Dian Diagnostics Group (300244.SZ), Novogene Co., Ltd. (688315.SH), and Jiangsu Cowin Biotech (688426.SH).