According to the statistics of Evaluate Med Tech, a world famous consulting company, the top five IVD companies, including Roche, Danaher, Abbott, Siemens and Thermo Fisher, took 55.5% of the IVD market share in 2016, more than half of the total. Though the initial development stage and low overall scale benefit of the IVD industry in China, with the continuous development of medical health field, the IVD industry has kept a growth rate of 20% in recent years in China, far more than the global increase speed of 5%, therefore, the IVD industry in China is catching up.
As an emerging industry with high growth, the domestic IVD companies enjoy a high valuation in capital market. By November 17, 2017, the average PE ratio of A share was 18.63X, and the average PE ratio of IVD industry was up to 86.47X. Among these, BGI (300676, SZ) was the first domestic medical device company with market value of over hundred billion with PE ratio of 265.02X, and the PE ratios of Berry Genomics (000710, SZ) and DAAN Gene (002030, SZ) were up to 150X. Moreover, some NEEQ IVD enterprises boasted PE ratio of 80X, the high valuation reflected the acceptance of capital market to the growth of IVD industry, and with a high industry growth rate, we believed that such situation is to be continued. During 2014 and 2017, the M&A of domestic IVD listed companies has been strengthening, and according to data, the total M&A amount of listed companies has been increased to CNY 6.041 billion in 2017 from CNY 1.843 billion in 2014. As planned by the State Council, we will establish a market-oriented, widely covering, multi-channel, low-cost, high-efficiency, strict-supervision direct financing system by 2020.