"Science and Technology Innovation Board Daily" news on November 11th (Reporter Zheng Bingxun) "Since 2023, the company's overseas COVID-19 test product sales revenue has decreased significantly, while the sales revenue of Class A and Class B flow detection products in China has increased, resulting in an increase in the proportion of domestic sales revenue in the company's revenue composition in China."

At the earnings conference for the first three quarters of 2024 held today, Chen Yinlong, Chairman of Botuo Biology (688767.SH), a leading domestic POCT company, explained the changes in the company's domestic and overseas revenue.

Previously, revenue from overseas regions almost accounted for all of Botuo Biology's revenue. For example, in 2021, Botuo Biology's revenue from overseas regions reached 1.763 billion yuan, contributing 96.97% of the total revenue. With the decline in demand for COVID-19 testing, Botuo Biology's overseas revenue rapidly decreased to 0.308 billion yuan in 2023, accounting for a slide in the overall proportion to 69.70%. Due to this drag, Botuo Biology's total revenue plummeted year-on-year by 76.75% to 0.442 billion yuan in 2023, and the net income attributable to the parent company also decreased by 86.22% to 0.107 billion yuan.

Chen Yinlong also revealed at the earnings conference that the year-on-year growth of overseas sales revenue for the first three quarters of 2024 is relatively fast. Therefore, Botuo Biology achieved a revenue of 0.389 billion yuan in the first three quarters of this year, a year-on-year increase of 24.51%. However, the net income attributable to the parent company was 89.2117 million yuan, still a year-on-year decrease of 2.53%. The net income attributable to the parent company in the third quarter also decreased by 43.07% year-on-year to 17.0366 million yuan.

Regarding the decline in net income in the third quarter, Botuo Biology explained that it was due to the fluctuation in the exchange rates of the US dollar, increased management expenses, and fluctuation in deposit rates. When a reporter from "Science and Technology Innovation Board Daily" questioned Botuo Biology during the earnings conference about whether they encountered new changes and challenges in developing overseas market business, Chen Yinlong did not respond.

However, with regard to the composition of core business, Chen Yinlong revealed that in the first three quarters of 2024, the immunoassay colloidal gold infectious disease testing and drug testing products contributed significantly to revenue. At present, the overseas market mainly focuses on drug testing and clinical testing, while in the domestic market, apart from developing new drug testing reagents, there is also product reserves and supply for high-incidence seasons of respiratory infections, as well as the improvement of the registration certificate for fluorescence immunoassay colloidal gold products.

Information shows that Botuo Biology is mainly engaged in the research and development, production, and sales of POCT diagnostic reagent products, covering five major categories: infectious disease testing, drug abuse (drug) testing, tumor marker testing, myocardial marker testing, and reproductive health testing.

Journalists from Star Daily found that the decrease in demand for COVID-19 testing not only dragged down the business performance of Botu Biosciences, but also had a certain impact on its business layout.

In the third quarter of this year, Botu Biosciences disclosed that due to significant changes in the external diagnostic industry (IVD) landscape and market in recent years, it would terminate the implementation of two investment projects - "In Vitro Diagnostic Research Center Construction Project" and "Marketing Operation Center Construction Project", and allocate 60 million yuan of the remaining funds to invest in the new "Microfluidic Fluorescence Detection Platform Project".

At the earnings conference, Chen Yinlong revealed that the new investment project in the Microfluidic Fluorescence Detection Platform project is in the early preparation stage. With the advancement of new technology path products, Botu Biosciences will provide a more comprehensive and advanced testing solution.

It is understood that microfluidic technology makes POCT devices more integrated and miniaturized, in line with the development trend of POCT products. POCT products are currently the most widely used and mature area in microfluidics. Prior to initiating the new investment project, Botu Biosciences had 2 years of experience in researching the Microfluidic Fluorescence Immunoassay System.

According to research data from consulting firm Yole Developpement, the global market share of microfluidic chips is expected to reach $32.3 billion by 2027.