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Market information for globally well-known scientific instrument companies in 2020

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Female lab technician analyzing liquid sample

In the last week of October 2020, two of the companies knocked on the technology innovation board within four days of each other.

From $40 to $215, from ¥35 to ¥131, the stock price of the two companies counterattacked, awakening attention to a new track.

This is scientific services. Compared with CRO, the business model is also selling water and shovels, but the market size is five times. Because of being out of the way, not being recognized.

Aladdin is a product enterprise, Titan technology is a platform enterprise.

Titan Technologies against Thermo-Fisher.

It is no longer appropriate to describe Thermo Fisher as an elephant. Its market value once exceeded 200 billion US dollars, and it has 80,000 employees worldwide. In 2020, its revenue reached 32.2 billion US dollars, up 26.1% year on year, and its revenue reached 2.8 billion US dollars in China alone.

Titan Technologies had $200 million in revenue in 2020.

Basic information of well-known companies in global scientific service industry

company namecountryrevenue 2020 (hundred million USD)profit 2020 (hundred million USD)main products and services
1Thermo-FisherUSA32278equipment, reagent, consumables, service, informatization
2DanaherUSA22336equipment, reagent, consumables
3Merck KgaAGER20824equipment, reagent, consumables, service
4AgilentUSA53.397.19equipment, consumables, informatization
5SHIMADZUJP35.662.94equipment, consumables
6METTLER TOLEDOCH30.856.05equipment, consumables, reagent
7Perkin ElmerUSA37.839.79equipment, informatization
8WatersUSA23.655.21equipment, consumables
9HORIBAJP18.391.42equipment, consumables
10AS ONEJP6.510.55consumables, reagent

According to an estimate by Citic Securities, in 2019, the domestic scientific service market scale was 237.9 ~ 270.3 billion yuan, including 93.7 ~ 106.4 billion yuan for experimental reagents, 93.7 ~ 106.4 billion yuan for experimental consumables, and 50.6 ~ 57.5 billion yuan for experimental analytical instruments.

In the next three to five years, the growth rate of the industry is expected to maintain 15%, and the biomedical industry will become the main battlefield of scientific services (medical institutions are thermo Fisher’s main customer base, accounting for 67% of the revenue).

CRO (Drug discovery, Preclinical, clinical) can also be seen as pan-science services, with a market size of about us $6.8 billion in 2019 and expected to reach US $22.2 billion by 2024, with a cagR of 26.5% (according to Frost & Sullivan’s latest report).

Why a large market 5 times larger than CRO, has not been born domestic leading? Because foreign brands form crushing, occupy at least 90% of the domestic market share. In the remaining 10% of the space, domestic enterprises are fragmented, and the market share of enterprises with a certain scale is only 1%-2%.

Scientific services is also a water seller, benefiting from the high growth of r&d investment in the biomedical industry, which is expected to partially repeat CXO’s trajectory. With the promotion of innovation-driven and basic research, and the dual logic catalysis of domestic substitution and the promotion of concentration, one or several domestic head companies with an income of ten billion yuan are expected to be born in the next 5-8 years.

MerckKGaA can provide more than 300,000 kinds of reagent products, while there are about 100,000 kinds of circulating reagents in the domestic reagent market. Domestic high-end scientific research reagent products are basically monopolized by international giants. Domestic biological laboratory disposable plastic consumables up to 95% rely on imports, Corning can produce tens of thousands of biological consumables, and only 700 kinds of Jite biological. The physical and chemical properties, biological properties and product accuracy of experimental consumables directly affect the success or failure of biotechnology research and development. Developed countries in Europe and The United States have invested for a long time to master the key core of the industry — modification technology and processing technology of polymer materials. The global laboratory equipment market is basically monopolized by Thermo Fisher, Agilent and Merck, and they build factories in China. Titan technology sells products from internationally famous manufacturers such as Thermo Fei, Dow Chemical, 3M and Corning as agents. The proportion of revenue from third-party brands is as high as 46.36%, so that the net interest rate has been hovering around 5% for a long time.

Thermo Fisher, known as the eternal idea machine, posted a net profit of $6.516 billion in 2020, up 72.5 percent year on year, and free cash flow of $6.8 billion, up 65.9 percent year on year. Titan Technology’s net profit in 2020 was 103 million yuan, up 38.7% year on year, while Aladdin’s net profit growth was even lower, only 16.7%.

Thermo Fisher’s net profit grew at a compound rate of 27.71% from 2014 to 2020, and its gross profit rate maintained over 40% for a long time, twice as big and fast as Titan Technology. With more than 35 years of deep cultivation in China, we have 8 factories, innovation centers in Shanghai and Suzhou, and spot supply centers in 19 cities. We have built our own scientific service cloud platform, and can deliver online orders within 1 hour to meet the needs of scientific research timeliness.

Thermo Fisher completed 230 acquisitions in 12 years, including $13.6 billion for Life Technologies, $4.2 billion for FEI, a maker of electron microscopes, and $7.2 billion for Patheon. $1.7 billion for Brammer Bio, a gene therapy company. The proposed $11.5 billion acquisition of QIAGEN, a provider of molecular diagnostics and sample preparation technology, came close in 2020.

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