AnPac Bio-Medical Science Co., Ltd.

For fiscal 2020, revenue was RMB 20.5 million ($3.1 million), up 89.1% from RMB 10.8 million in fiscal 2019. Gross profit was RMB 12.9 million ($2.0 million), up 168.8% from RMB 4.8 million, and gross margin improved to 62.8% from 44.2%. Net loss was RMB 80.6 million ($12.3 million), compared with RMB 101.6 million in fiscal 2019. Cost of revenue was RMB 7.6 million ($1.2 million), up 26.1% from RMB 6.0 million. On the balance sheet, the company said it had only RMB 8.2 million of debt remaining after using IPO proceeds to pay down debt. No formal next-quarter or full-year numeric guidance was given, but management said Q1 2021 test volume was a record and they expect revenue growth and gross margin expansion to continue.

Dr. Chris Yu framed 2020 as a difficult COVID-impacted year but emphasized strong execution, including revenue growth, gross margin expansion, reduced net loss and debt, and progress in R&D and clinical data collection. He highlighted growing acceptance of the company’s cancer screening products, the launch of new products, and a larger patent and sample base, ending with a confident tone that the company is positioned for another solid year. He also said Q1 2021 test volume was already at a record level and described the cancer screening market as still early-stage with long runway.

Edwards Tang focused on the financial improvement in fiscal 2020: revenue of RMB 20.5 million, gross profit of RMB 12.9 million, gross margin of 62.8%, and a reduced net loss of RMB 80.6 million. He noted cost of revenue rose to RMB 7.6 million, mainly because of more comprehensive multi-cancer testing and higher depreciation from more CDA devices. On cash and capital structure, he said operating cash outflow was RMB 59.0 million, investing cash outflow was RMB 2.5 million, financing cash inflow was RMB 60.9 million, and debt was cut to RMB 8.2 million remaining.

Analysts asked about the growth of products outside CDA, and management said the company has developed an immunology test and a CDA/ct-DNA combination test, with clinical data suggesting CDA is effective for prognosis and follow-up. They also asked what drove 2020 revenue growth; Dr. Yu said larger test-package mix, higher average selling prices, and initial contribution from new products were key factors. On expenses, management said it would try to control costs as volumes grow, and on the new sensor and Class III process, Dr. Yu said the sensor is being rolled into both China and U.S. labs and will be used in the medical device submission, with May targeted for testing submission and a clinical-trial phase to follow.