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MGI Tech Ramps up Global Sequencer Sales in 2023 as Overall Revenues Decline 32 Percent


NEW YORK – MGI Tech increased its sales of sequencing instruments and reagents across the globe in 2023 but saw a significant decline in demand for its lab automation platforms, resulting in an overall revenue decline of 32 percent for the year.

Total revenues also declined by 14 percent in the first quarter of 2024 compared to the same period last year.

For the year ended Dec. 31, 2023, the Chinese sequencing instrumentation maker booked RMB 2.87 billion ($395.7 million) in revenues, down from RMB 4.21 billion in the prior year, according to the company’s annual report filed with the Shanghai Stock Exchange on Thursday.

Of the total, RMB 2.29 billion came from sequencing instruments and consumables, a 30 percent increase from RMB 1.76 billion in 2022. Meanwhile, lab automation revenues plummeted 83 percent from RMB 1.25 billion in the year-ago period to RMB 218.3 million. New business and other revenues, which include biobanking instruments and ultrasound diagnostic devices, contributed RMB 357.7 million to revenues in 2023, down 70 percent year over year from RMB 1.20 billion.

Considering sequencing revenues alone, MGI made significant inroads in both the domestic market and overseas.

Within mainland China, MGI’s sequencing revenues were RMB 1.44 billion, representing 24 percent year-over-year growth. Sequencing revenues overseas totaled RMB 848.5 million, up 42 percent from 2022. Specifically, in Asia-Pacific outside of mainland China, Hong Kong, Macao, and Taiwan, sequencing revenues were RMB 322.9 million, up 11 percent from the prior year. MGI said the company also inked 10 new distributors in the region during 2023, including for new markets such as Oman and Pakistan.

In Europe, where the firm had made its entire sequencing platform portfolio available to many countries last May, sequencing revenues were RMB 366.9 million, a 48 percent increase from 2022.

In the Americas, where MGI returned to the US market at the beginning of the year through subsidiary Complete Genomics, sequencing revenues totaled RMB 158.7 million, a 160 percent jump from the year-ago period. The firm said it nabbed 40 new customers in that region.

During 2023, MGI installed 854 new sequencers worldwide, 695 of them in mainland China, a 41 percent increase from 2022.

Meanwhile, total revenues declined in all geographic regions in 2023. Revenues in mainland China, Hong Kong, Macao, and Taiwan were RMB 1.86 billion, a 31 percent drop from RMB 2.70 billion in 2022. Revenues in Asia-Pacific outside of mainland China, Hong Kong, Macao, and Taiwan were RMB 391.5 million, down 26 percent year over year from RMB 532.4 million. Revenues in Europe and Africa were RMB 418.4 million, representing a 39 percent drop from RMB 690.9 in the prior year, and revenues in the Americas were RMB 196.2 million, a decrease of 31 percent from RMB 283.7 in 2022.

MGI disclosed that revenues from sales to other companies affiliated with BGI Group, including BGI Genomics and BGI Research, were RMB 763.0 million in 2023. These were the firm’s biggest customers and made up 26 percent of its total revenues.

MGI attributed the overall revenue declines to changes in market demand, which resulted in a “significant decrease” in lab automation platform sales, as well as to increasing R&D and marketing costs.

The firm's 2023 net loss attributable to shareholders was RMB 607.5 million compared to a profit of RMB 2.03 billion in 2022, which included a $325 million settlement payment MGI received from Illumina. Loss per share for 2023 was RMB 1.46, compared to earnings per share of RMB 5.26 the year before.

The company’s adjusted 2023 net loss attributable to shareholders, which excludes nonrecurring income, was RMB 682.8 million, a huge decline from a net profit of RMB 493.0 million in 2022. Loss per share excluding nonrecurring income was RMB 1.65, compared to earnings per share of RMB .69 in 2022.

MGI’s 2023 R&D expenses were RMB 910.0 million, a 12 percent increase from RMB 814.4 million in 2022. SG&A expenses were RMB 1.36 billion, up 11 percent from RMB 1.22 billion the year before.

As of the end of 2023, MGI had more than 2,860 employees, covering 38 countries or regions on five continents, the company said. Of the total workforce, 959, or 33 percent, worked in R&D compared to 1,010 in 2022, and 917 in sales and marking, a 16 percent increase from the year-ago period. About 41 percent of the company’s employees worked overseas.

MGI also established four new subsidiaries in 2023, three overseas and one in China.

Specifically, the firm noted that MGI Tech New Zealand, with NZ$100,000 (US$59,557) in registered capital, will handle product import and export, equipment and reagent sales, and software and information services, as well as R&D and collaborations.

Similarly, MGI Tech Belgrade, incorporated in Serbia with 245 million Serbian dinars ($2.2 million), and MGI Tech Netherlands, which has €300,000 ($321,696) in capital, will carry out sales of sequencing platforms and reagents, the company noted.

In the Chinese eastern city of Hangzhou, MGI invested RMB 50.0 million to establish MGI Hangzhou Jifeng Biotech for sequencing chip R&D and production, as well as sequencing instrument and consumable sales.

MGI also reported its Q1 2024 financial results on Thursday. For the quarter ended March 31, MGI booked RMB 530.7 million in revenues, down 14 percent from RMB 619.0 million in Q1 2023.

MGI reported RMB 201.0 million in net loss attributable to shareholders in Q1 compared to RMB 149.8 million in net loss during the same period last year. Per-share loss was RMB .49, up from a RMB .36 loss per share in Q1 2023.

MGI’s R&D expenses for the quarter were RMB 202.5 million, a 7 percent decline from RMB 218.8 million in the first quarter of last year. SG&A expenses were RMB 326.8 million, up 22 percent from RMB 267.6 million in Q1 2023.

MGI ended the quarter with RMB 4.22 billion in cash and cash equivalents.

At market close on the Shanghai Stock Exchange on Friday, MGI’s shares were down almost 2 percent at RMB 52.40.