NEW YORK – Flush with $325.0 million in settlement payment from Illumina, MGI Tech reported on Thursday that its third-quarter revenues increased 5 percent compared to the same period last year.
Releasing its first financial results since going public last month, the Shenzhen-based Chinese sequencing technology company, an affiliate of BGI, booked RMB 929.0 million ($128.5 million) in revenues for the quarter ended Sept. 30.
The firm's Q3 net profit attributable to shareholders was RMB 1.68 billion, an almost 60-fold increase from the same quarter last year. The company attributed the surge to the recent settlement payment received from Illumina, which ended the yearslong legal battle between the two sequencing tech firms.
Without the non-recurring settlement, MGI's Q3 net profit was RMB 44.0 million, a 45 percent drop compared to Q3 2021. The firm said the decline was mainly caused by growing operational and R&D costs, as well as shrinking gross profits due to product changes.
MGI's Q3 diluted earnings per share were RMB 4.36. The firm's R&D expenses for the quarter grew 12 percent year over year to RMB 193.8 million.
For the first three quarters of 2022, MGI reported revenues of RMB 3.29 billion, representing 16 percent year-over-year growth.
Similar to Q3, Illumina's settlement boosted MGI's net profit attributable to shareholders for the first three quarters to RMB 2.02 billion, more than tripling them in the same period a year ago.
The firm’s R&D expenses for the first three quarters totaled RMB 525.3 million, a 15 percent increase from the same period in 2021. Diluted earnings per share for the first three quarters were RMB 5.36.
MGI ended the quarter with RMB 7.82 billion in cash.
In addition, MGI disclosed that earlier this month, the firm, together with other BGI affiliates, inked an RMB 273.0 million deal with the Shenzhen government, which granted the companies the land use right to a city property that spans 102,999 square meters (roughly 1.1 million square feet). According to a company filing, the land is coded by the municipal government for biotechnology R&D use and can accommodate a total building area of 308,880 square meters (about 3.3 million square feet).
Previously, MGI disclosed in its IPO prospectus that the company’s annual total revenues from 2019 to 2021 were RMB 1.09 billion, RMB 2.78 billion, and RMB 3.93 billion, respectively. Net profit for 2021 and 2020 was RMB 475.7 million and RMB 255.6 million, respectively, while the firm had a net loss of RMB 238.9 million in 2019.
In Thursday trading on the Shanghai Stock Exchange, MGI's stock declined almost 9 percent to RMB 120.18.