Hechuan Medical Files IPO Prospectus: Global Microfluidics CDMO Leader with Over 80% Overseas Revenue

Microfluidics technology is bringing disruptive innovation to the fields of biomedicine and chemistry. Microfluidic chips can integrate, or essentially integrate, basic operational units involved in biology and chemistry—such as sample preparation, reaction, separation, detection, cell culture, sorting, and lysis—onto a single chip measuring just a few square centimeters or even smaller. The 14th Five-Year Plan for Bioeconomic Development mentions the need to develop advanced technologies such as microfluidic chips. Currently,Microfluidic technology has been applied in fields such as point-of-care testing (POCT), molecular diagnostics, gene sequencing, digital PCR, and organ-on-a-chip systems, with its most extensive and mature applications found in the POCT sector.。

Accelerated by the pandemic, POCT molecular diagnostic products have been widely adopted in clinics and public settings, and have begun to enter the home-use scenario as pandemic management becomes routine. Meanwhile, in the IVD field, the model of at-home sample collection is gaining popularity. These trends are driving a shift in the IVD industry from B2B to B2C. End consumers, who must pay out-of-pocket for POCT consumables, exhibit high price sensitivity. Although microfluidic chips can facilitate the high integration and miniaturization of in vitro diagnostic products, their higher cost compared to traditional testing consumables may hinder the widespread adoption of POCT and microfluidic technologies to some extent. Consequently, market demand for low-cost microfluidic chips is becoming increasingly strong.

Leveraging China’s advanced manufacturing ecosystem, Hochuen, an international microfluidics CDMO, is experiencing rapid growth.Provides one-stop CDMO services to global healthcare enterprises, covering microfluidic chip and medical device consumable development, mold manufacturing, prototype design optimization, and both small-batch and mass production. The company also offers customized services including assembly, quality control, packaging, and sterilization.Hochuen Medical can reduce production costs by 30%-50% and shorten the product production cycle, meeting the needs of rapid corporate development.

Over the past nine years, Hochuen has risen to the forefront of the global microfluidic CDMO industry. Currently,The company manufactures microfluidic chips and medical consumables for more than 240 enterprises worldwide, including many leading domestic and international companies in the IVD and sequencing industries., establishing a strong reputation and brand image within the industry.

The story begins with an international microfluidics expert’s insights into global market demand, and a pioneer in the traditional electronic components CDMO industry transitioning toward the high-end market.

High barriers to R&D in microfluidic chips, which integrate multidisciplinary fields including materials science, physics, chemistry, electrochemistry, optics, biology, disease diagnostics, and life sciences, result in high development costs and long cycles. Meanwhile, the threshold for mass production of microfluidic chips is high, involving key technologies such as photolithography, thin-film deposition, and molecular bonding. These processes demand high-precision manufacturing and rely on expensive, high-end production equipment. Consequently, microfluidic technology has yet to achieve widespread market adoption.

For IVD companies, in-house production of microfluidic chips entails significant consumption of both time and capital, not only requiring substantial upfront investment and incurring high manufacturing costs, but also driving up product pricing. Microfluidic CDMOs can reduce production costs and lead times through standardized manufacturing processes and a stable supply chain, thereby accelerating product commercialization to some extent.

In 2015, China’s microfluidics market was in its early stages, with applications in the healthcare sector being gradually explored. At that time, the domestic medical device CDMO market was still in its infancy, and services related to microfluidic chip production were particularly scarce. To address the substantial market demand, Dr. Liu Hui and Zeng Lijiang co-founded Hochuen. The former has many years of expertise in the IVD and microfluidic chip sectors, having worked for several leading overseas companies. He specializes in the application and commercialization of microfluidic chips in IVD and life sciences, with extensive experience in technical R&D and team management. The latter is a well-known entrepreneur from Shenzhen with deep roots in traditional manufacturing. His co-founded company, Hechuan Technology, has long served as an OEM supplier for major international electronics brands, accumulating profound expertise in manufacturing and corporate management.

With the support of Hechuan Technology, the two parties joined forces to enter the high-end medical manufacturing market, achieving effective integration of their R&D and industrialization teams. Leveraging the highly efficient and high-quality production models accumulated in the manufacturing sector, combined with advanced microfluidic chip technology, Hochuen Medical rapidly established its microfluidic chip CDMO capabilities. Meanwhile, the company quickly implemented a comprehensive quality management system for medical production, standardizing and optimizing manufacturing processes to enable customized production of various microfluidic devices for domestic and international clients within shorter lead times.

The microfluidics CDMO market has high barriers to entry.CDMO companies' mastery of core technologies, multidisciplinary team backgrounds, manufacturing process control, service experience, patent protection, and pricingThese factors are all key considerations for corporate clients. Meanwhile, the CDMO service cycle for microfluidic chips is long and stable; once brand awareness and trust are established, downstream customers are unlikely to switch service providers easily, making first-mover advantage equally important.

In terms of team building, Hochuen has established a high-quality talent pool with extensive expertise in biomedical technologies and industrialization. Meanwhile, the company is supported by a distinguished external advisory board comprising world-renowned microfluidics experts, including Professor Abraham Lee, Chair of the Department of Biomedical Engineering at the University of California, Irvine; Professor David Beebe from the University of Wisconsin–Madison; and Professor Lin Bingcheng, a researcher at the Dalian Institute of Chemical Physics, Chinese Academy of Sciences.

In terms of technological breakthroughs, Hochuen has mastered the core capabilities in the research and development and production of microfluidic chips, includingMicron-level mold finishing, micron-level injection molding, precision laser machining, chip surface chemical and plasma treatment, polymer bonding (laser, ultrasonic, molecular diffusion, UV, pressure-sensitive adhesive, thermal stress, etc.), biological reagent production (liquid pouches and dry reagents), PCR quality testing and controletc.

In terms of mass production capacity and quality control, the companyEstablishment of Production Bases in Shenzhen, Dongguan, and Malaysia, equipped with multiple core production facilities such as high-end micro-precision injection molding machines and laser welding machines, enabling the realization ofAnnual production of tens of millions to over 100 million microfluidic chips. Furthermore, some of the company’s products have been integrated into automated production lines, enabling customized designs tailored to specific needs and further enhancing production standardization and efficiency. In recent years, driven by growing market demand and rising requirements for product quality and standardization, CDMO companies have progressively invested in automated manufacturing. Leveraging extensive experience in automated production accumulated from the traditional manufacturing sector, Hochuen’s team has effectively applied this expertise to the production of microfluidic devices.

Furthermore, Hochuen entered the microfluidic CDMO sector at an early stage, securing a first-mover advantage and accumulating extensive service experience. The company has obtained ISO 13485 quality management system certification and completed FDA supplier registration. Meanwhile, Hochuen remains committed to global development, having actively expanded its overseas business since its inception.Our overseas clients are distributed across North America, Europe, Australia, Asia, and other regions, with overseas sales accounting for over 80% of the company’s total sales revenue.. Precisely because Hochuen Medical derives the majority of its revenue from overseas clients, its performance remained unaffected and continued to grow steadily last year, despite an overall decline in revenue across China’s IVD industry.

Amid the increasingly fierce competition in China’s IVD market, coupled with the approaching volume-based procurement and tighter medical insurance cost controls, companies are raising their expectations for CDMO service quality and product development speed. During the pandemic, an IVD client approached Hochuen Medical to develop a microfluidic chip for COVID-19 testing, hoping to achieve mass production as soon as possible. Ultimately, the company accomplished the breakthrough from zero to one and then to mass production in just two months. Taking on this urgent mandate demonstrated Hochuen’s advantages in rapidly responding to demands and efficiently advancing its one-stop services. This achievement also secured Hochuen Medical a long-term collaborative partner.

Overall, the microfluidics market in Europe and the United States started earlier, with giants such as Abbott and Roche having successfully developed microfluidic products. The microfluidics CDMO service has also developed accordingly, but due to high overseas production costs, the scale of related enterprises is limited. In contrast, China's microfluidics market is developing rapidly, with continuous application innovations in fields such as POCT, digital PCR, gene sequencing, and organ-on-a-chip. Although imports currently lead the market, the trend of domestic substitution is strong, providing fertile ground for the growth of microfluidics CDMOs.

In the microfluidics CDMO market, Hochuen has established a comprehensive high-end production line after years of development, built a stable customer base both domestically and internationally, and continues to expand its client portfolio. To further mitigate geopolitical risks and provide higher-quality localized services, Hochuen is actively constructing a production base in Malaysia.Expected to enter mass production in mid-2026, further expanding production capacity. The establishment of overseas subsidiaries and manufacturing bases will also “safeguard” the global expansion of domestic IVD companies.

Moving forward, Hochuen will continue to increase its construction and investment in overseas production bases. Meanwhile, at the level of microfluidic CDMO services, it will persistently break through key technologies and niche application areas, introduce more specialized production equipment and multidisciplinary talent, and enhance service quality and efficiency. In the long term, as a key player in the microfluidics industry chain, Hochuen will leverage prevailing trends to strengthen its self-sustaining capabilities, while effectively collaborating with upstream and downstream partners to promote the application of microfluidic technology in the medical field, achieving win-win outcomes for all stakeholders!