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MGI Tech Sees Strong Sequencing Revenue Growth in H1 2023

NEW YORK – MGI Tech reported on Friday that its first-half 2023 sequencing revenues rose 40 percent while total revenues dropped 39 percent.

For the half year ended June 30, the Chinese next-generation sequencing technology company booked RMB 1.10 billion ($151.7 million) in sequencing revenues, according to the firm's filing with the Shanghai Stock Exchange. Of those, instrument revenues totaled RMB 458.8 million, a 36 percent increase from the same period in the prior year. Consumable revenues were RMB 623.6 million, up 42 percent from the first half of 2022. Service and other revenues were RMB 15.3 million, representing 96 percent growth year over year.

By geographical regions, MGI's sequencing revenues in mainland China, Hong Kong, Macau, and Taiwan were RMB 695.3 million, up 36 percent from H1 2022. Sequencing revenues in the rest of Asia-Pacific were RMB 183.9 million, an 11 percent increase from the year-ago period, driven by the national genome projects in the UAE and Thailand, the company said.

The firm saw an 84 percent increase in sequencing revenues in Europe and Africa, booking RMB 144.1 million, driven by single-cell, spatial, and microbial sequencing projects. Meanwhile, MGI's sequencing revenues in the Americas, where it was allowed to be back in the US market in January, were RMB 74.4 million, more than doubling the number from the same period in 2022. 

During H1 2023, MGI said it installed 63 percent more new sequencers year over year compared to H1 2022, but the firm did not disclose the specific number. By the end of the reporting period, the company said it grew the installed base for its sequencers to 2,910 worldwide.

Despite sequencing revenue growth, MGI's total revenues for H1 2023, which were RMB 1.44 billion, dropped 39 percent year over year, from RMB 2.36 billion in 2022. The company attributed the decline to an 87 percent decrease in lab automation revenues due to "the changing market demand" as well as a 68 percent decrease in so-called "new business" revenues.

The company did not disclose its exact lab automation revenues but noted that its "non-public-health-related" lab automation revenues for H1 2023 were RMB 76.8 million, demonstrating a "stable" sales pace after COVID.

MGI's first-half 2023 R&D spending was RMB 432.1 million, up 30 percent from RMB 331.5 million in the same period a year ago, driven by the expanding R&D workforce. Meanwhile, it's first-half SG&A spending was RMB 581.1 million, almost flat from RMB 571.6 million in the prior year.

The H1 net loss attributable to MGI shareholders was RMB 98.0 million compared to a net profit of RMB 343.7 million from H1 2022. Loss per share was RMB 0.24 compared to earnings per share of RMB 0.92 during the same period last year.

During H1 2023, MGI established two new subsidiaries in New Zealand and Serbia, with registered capital of NZD $100,000 ($59,797) and 245 million Serbian dinars ($2.3 million) respectively, to "support local business growth," the company said.

The company said it also inked a partnership with Xpress Genomics, a Swedish high-throughput single-cell technology company, aiming to jointly develop a fully automated and scalable high-throughput, full-length, single-cell sequencing platform.

Additionally, MGI said its DNBSeq-T7 sequencer obtained the Medical Device Registration Certificate from the Ministry of Food and Drug Safety of the Republic of Korea.

By market close Friday on the Shanghai Stock Exchange, MGI shares remained almost flat at RMB 86.55.