Mega Genomics Limited Files IPO Prospectus as China's Profitable Market Leader in Consumer Genomics and Cancer Screening

China’s health management market has already exploded. In 2016, the state issued and implemented the “Outline of the ‘Healthy China 2030’ Plan,” which pointed out the need to implement a comprehensive prevention and control strategy for chronic diseases, aiming to achieve chronic disease health management for the entire population across the full life cycle by 2030.

According to the "2021 Overview of China's Health Management Industry" released by LeadLeo Research Institute, the market size of China's health management industry grew from RMB 11 billion in 2016 to RMB 27 billion in 2020, with a compound annual growth rate (CAGR) of 31.64%. The market size is estimated to reach RMB 41 billion in 2021 and RMB 136 billion in 2025, representing a CAGR of 20.8%.

As an advanced approach and emerging direction in health management, genetic testing is suitable for diverse populations and can be applied across all aspects of health management, effectively enabling early disease screening and intervention. Among these, consumer-grade genetic testing and cancer screening genetic testing are gradually increasing their share in the health management market.

With the rise in China’s educational attainment and average income, deepening population aging, and the growing annual economic burden of major diseases, individuals are increasingly prioritizing advanced testing—including consumer-grade genetic testing and cancer screening—for personal prevention and health management.Consumer-grade genetic testing and cancer screening genetic testing have gradually become essential test items in major hospitals and health examination centers.

In recent years, the two high-potential sectors of consumer-grade genetic testing and cancer screening genetic testing have gained increasing recognition and attention, achieving rapid development.As China’s largest consumer-grade genetic testing and cancer screening platform, Meinian Gene has emerged as the leading enterprise in these two high-growth sectors.

In August, Because of Health Science and Technology(Beijing) Co., Ltd. submitted its prospectus to the Hong Kong Stock Exchange,Poised to become the first domestic enterprise to list on the Hong Kong market as a leading player in both the consumer-grade genetic testing and cancer screening sectors.

Meiyin Gene, founded in 2016, is a leading consumer-grade genetic testing and cancer screening platform in China.

As of June 30, 2021, Mei Yin Gene had provided genetic testing services to over 10 million individuals, ranking first in the industry by cumulative customer base. In 2020, its average monthly new customer acquisitions exceeded 230,000, marking the highest customer growth rate in the industry. According to Frost & Sullivan, Mei Yin Gene held a 65.8% market share in the consumer-grade genetic testing sector and a 49.3% market share in China’s colorectal cancer screening genetic testing market in 2020, based on testing volume. Mei Yin Gene is also the only company in these two sectors to have achieved sustained profitable growth.

Consumer-grade genetic testing has emerged as one of the hottest niche segments in the global genetic testing industry in recent years, with numerous leading genetic testing companies both domestically and internationally actively expanding their presence in this field.

The United States has validated the value of the consumer-grade genetic testing sector.

The U.S. consumer-grade genetic testing industry started early and has a history of nearly 20 years, with ancestry testing as its primary offering. Currently, the number of consumer-grade genetic tests in the United States has approached 30 million, with a penetration rate of 8.8%.

23andMe and Ancestry are the leading consumer genetic testing companies in the United States. In August 2020, Blackstone acquired a majority stake in Ancestry, a U.S. consumer genetic testing company, at a valuation of $6 billion. In June 2021, another U.S. consumer genetic testing company, 23andMe, successfully went public, with its current market capitalization exceeding $5 billion.

China’s consumer-grade genetic testing industry started relatively late and is still in its early stages. Market education remains immature, with a conversion rate of only 0.8%, significantly lower than that of the United States, indicating substantial room for growth.

During its development, the United States served as the primary benchmark for Chinese consumer-grade genetic testing companies. The industry in China began to take shape in 2013 and experienced rapid growth around 2015, with a surge of new enterprises emerging and launching numerous entertainment-oriented services, such as ancestry testing, modeled after U.S. counterparts.

However, in the following years, ancestry testing failed to gain significant traction in China, and consumer-grade genetic testing companies featuring ancestry analysis encountered widespread setbacks.

Meiyin Gene has keenly identified the differences between the Chinese and U.S. consumer-grade genetic testing markets, particularly the significant disparities in product demand and average transaction value.Chinese consumers show limited interest in ancestry testing, but demonstrate a stronger willingness to purchase health management products. Furthermore, constrained by the purchasing power of the Chinese population, consumer-grade genetic testing services must strengthen cost control and reduce the average transaction value per customer.

Replicating the U.S. model is not feasible; Meiyin Gene has chosen a path markedly different from that of American companies,Starting from product requirements and cost control, we have successfully explored a development path for consumer-grade genetic testing based on China’s actual national conditions.

In terms of product positioning,Because of Health Science and Technology(Beijing) Co., Ltd. is rooted in rigorous clinical medicine, grounded in evidence-based medicine, and leverages forward-looking market insights to develop health management genetic testing products that are urgently needed by the market. The company has launched dozens of consumer-grade genetic testing services, including ApoE genotyping, folate metabolism capacity assessment, Parkinson’s disease risk assessment, comprehensive cancer risk assessment, cardiovascular and cerebrovascular disease risk assessment, whole-genome sequencing for individuals, and whole-exome sequencing for adults.

In terms of cost control,Meinuo Gene has implemented a comprehensive, integrated layout spanning the entire value chain—from upstream to downstream. It has established a low-cost, high-throughput, automated production system and an integrated technical platform, with a daily testing capacity exceeding 50,000 tests. The company offers short turnaround times, and its test results demonstrate a concordance rate of up to 99.9% with the industry gold standard, enabling the provision of cost-effective, high-throughput, automated genetic testing solutions across diverse scenarios.

China boasts a larger population base, customer base, and more abundant medical resources. Moreover, as the user base continues to grow, technology advances, and market education strengthens, China’s consumer-grade genetic testing industry is becoming increasingly mature, with its penetration rate poised for rapid growth.

Now,Rooted in the Chinese market, Meiyin Gene has demonstrated capabilities surpassing those of leading U.S. enterprises in product portfolio, market channels, and business scale.

Meinuo Gene is the largest consumer-grade genetic testing platform in China and one of the top three such platforms globally. In terms of the number of tests conducted, the company held a 65.8% market share in China’s consumer-grade genetic testing market in 2020, more than ten times that of the second-largest player. By annual operating revenue, its consumer-grade genetic testing services accounted for 34.2% of the Chinese market in 2020, ranking first and exceeding the combined total of the second- through sixth-ranked competitors.

In just five years since its establishment, the company has cumulatively provided genetic testing services to over 10 million customers, whereas U.S. consumer genetic testing companies Ancestry and 23andMe took nearly two decades to accumulate a comparable customer base. It is foreseeable that the market value and growth potential of Meiyin Gene will far exceed those of the leading U.S. consumer-grade genetic testing companies.

Consumer-grade genetic testing and cancer screening exhibit significant overlap in market channels and target demographics, while cancer screening also imposes stringent requirements on product positioning and integrated capabilities. Leveraging its channel advantages and cost-control capabilities, MyGenomics is better positioned to adeptly expand into new business directions.

In 2017, Meiyin Gene began to lay out the cancer screening market, and successively launched products such as Septin9 colorectal cancer screening, SDC2 colorectal cancer screening, and RNF180/Septin9 gastric cancer screening.

There is a significant gap in cancer screening in China. According to Frost & Sullivan, China had the highest number of new cancer cases worldwide in 2020, rising from 4.1 million in 2016 to 4.6 million in 2020, and is projected to reach 5.8 million by 2030. Due to the lack of effective cancer prevention programs, the survival rate of cancer patients in China is significantly lower than that in many other countries with more comprehensive cancer prevention mechanisms.

The top five cancers in China's cancer screening market are gastric cancer, colorectal cancer, lung cancer, breast cancer, and liver cancer.In 2020, the screening market potential for the aforementioned five cancer types totaled approximately RMB 201.5 billion.

There is an urgent need for screening in China, particularly for colorectal cancer and gastric cancer, which have high incidence rates among the Chinese population.

In 2020, colorectal cancer was the third most prevalent cancer type globally and in China, with 453,400 new cases and 218,200 deaths. Gastric cancer ranked second in incidence among cancers in China, with 469,600 confirmed cases in 2020, and its mortality rate ranked third among all cancers in China, resulting in 341,200 deaths in 2020. Due to its high incidence and mortality rates, the gastric cancer screening market holds significant growth potential.

The market for colorectal cancer screening and gastric cancer screening in China increased from RMB 2.6 billion and RMB 1.1 billion in 2016 to RMB 3.3 billion and RMB 2.4 billion in 2020, respectively, and is expected to further grow to RMB 18.8 billion and RMB 16.5 billion by 2030, with compound annual growth rates (CAGRs) of 19.7% and 20.2%, respectively, from 2025 to 2030.

In recent years, growing attention has been paid to cancer screening, and the global market for genetic testing in cancer screening is experiencing rapid growth. In August 2021, Grail was acquired by Illumina for $8 billion, underscoring the substantial commercial value of leading enterprises in the U.S. cancer screening sector. In China, companies active in the cancer screening field, such as Burning Rock Biotech, Genetron Health, and New Horizon Health, have gone public one after another, each achieving a market capitalization exceeding RMB 10 billion.

Because of Health is far ahead in commercial performance in the field of cancer screening.

Mein Gene is currently the largest cancer screening genetic testing platform in China. As of June 30, 2021, the company had completed more than 270,000 cancer screening tests cumulatively. In terms of the number of cancer screening customers, Mein Gene serves tens of times more clients than other companies in the industry; in terms of profitability, it is the only profitable company in this field; and in terms of growth rate, the compound annual growth rate (CAGR) of its colorectal cancer screening service revenue over the past three years reached 184.9%.Regarded as a leading enterprise and scarce resource in the field of cancer screening.

VCBeat’s analysis of Meinian Gene’s prospectus reveals that the key factor enabling Meinian Gene to stand out in the consumer-grade genetic testing and cancer screening genetic testing sectors is its ability to ground its products in rigorous medical science,Launched 89 products with high commercialization and profitability potential, covering nearly all high-incidence diseases among the Chinese population.such as the nervous system, digestive system, cardiovascular and cerebrovascular systems, nutrient absorption, and tumor screening.

Taking Alzheimer’s disease as an example, according to data from Frost & Sullivan, there were approximately 12.5 million patients with Alzheimer’s disease in China in 2020. Currently, there are no effective methods for early diagnosis and screening of Alzheimer’s disease; by the time brain atrophy is detected via cranial CT, the pathological changes have already occurred and are irreversible. Meiyin Gene’s brain health genetic testing product targets key susceptibility genes associated with Alzheimer’s disease,Risk stratification of the population through APOE gene testing enables effective health management for high-risk individuals and is currently the only method available for early warning of Alzheimer’s disease.Meanwhile, the APOE gene has been included in the "Chinese Guidelines for the Diagnosis and Treatment of Dementia and Cognitive Impairment."

In China, there are more than 2 million patients with Parkinson’s disease. The disease has an insidious onset and atypical symptoms, leading to a delay in early treatment in up to 60% of cases. Moreover, the disease course is irreversible and incurable. Meiyin Gene’s Parkinson’s genetic testing product was developed in collaboration with experts from top-tier tertiary hospitals specializing in neurology in China.The only product in China capable of screening individuals in the “prodromal stage” of Parkinson’s disease, filling the market gap for effective early diagnosis and screening methods for Parkinson’s disease.

In the field of genetic testing for nutrient absorption, Meiyin Genetics also offers a range of products. Among them, the most important isMTHFR Gene Folate Metabolism Capacity Functional AssessmentThe MTHFR gene has been included in the "Expert Consensus on the Diagnosis and Treatment of H-type Hypertension." Approximately 20% of the Chinese population carries this defective gene variant. Individuals with this variant cannot obtain sufficient folate from a normal diet to meet their physiological needs, thereby increasing their susceptibility to hyperhomocysteinemia and hypertension. Meiyin Gene has pioneered technological advancements that have significantly reduced testing costs, enabling this product to serve as a universal screening tool for China's 1.4 billion people, thus demonstrating substantial socio-economic value.

Meiyin Gene also offers a wide range of bundled products, such as the Cardiovascular and Cerebrovascular Disease Risk Assessment Package, which evaluates the risk of seven common conditions including coronary heart disease, and the Comprehensive Cancer Risk Assessment Package, which assesses the risk of developing various types of cancer. Leveraging advanced R&D capabilities and a fully automated production system, Meiyin Gene provides end consumers with highly cost-effective services.

In the field of high-incidence cancer screening, Meiyin Gene has also established a presence. For instance, it offers the same type of testing as Angelina Jolie’s, which is recommended by numerous guidelines.BRCA1/2 Hereditary Breast and Ovarian Cancer Gene Testing, breast and ovarian cancers caused by BRCA1/2 gene mutations are extremely severe, and the carrier rate in the general population is relatively common. Cutting-edge research in the United States shows that universal screening for BRCA1/2 genes in all women over the age of 30 could prevent nearly one million women from developing breast cancer.

Because of Gene'sNon-invasive Screening for Gene Methylation in Gastric and Colorectal Cancer, requiring only a single blood sample, it enables non-invasive and convenient screening for gastrointestinal tumors, representing an ideal prevention and control testing solution that integrates compliance, accuracy, and cost-effectiveness in the field of gastrointestinal tumor prevention and control.

MeinGene’s Whole Exome Sequencing Package, which includes hereditary cancer risk assessment, screening for severe genetic disorders, and carrier screening for recessive genetic conditions, provides customers with the most comprehensive genetic evaluation and precise health management recommendations, serving as a complete “user manual for the human body.”

VCBeat also discovered through its analysis of Mei Yin’s prospectus that Mei Yin Gene collaborates with multiple experts from top-tier tertiary hospitals in China to jointly develop products. Meanwhile, many of the company’s products have received positive feedback from both specialists at these tertiary hospitals and patients.

According to publicly disclosed information,Meinuo Gene’s adjusted net profits for 2018, 2019, 2020, and the first half of 2021 were RMB 37.55 million, RMB 46.22 million, RMB 93.80 million, and RMB 41.44 million, respectively, making it the only company in China’s consumer-grade genetic and tumor genetic screening market to achieve sustained profitability.

It is worth noting that in 2020, China’s cancer screening market experienced explosive growth, accompanied by exceptionally high gross profit margins. Consequently, Because of Health Science and Technology (Beijing) Co., Ltd. significantly increased its strategic emphasis and investment in the cancer screening business, leading to a rapid surge in revenue from cancer screening services, which jumped from the millions in 2019 to the tens of millions. Notably, the revenue generated from cancer screening services in the first half of 2021 alone nearly matched the company’s total annual revenue from this segment in 2020.

In addition, Meiyin Gene launched its gastric cancer screening product in March 2021, with revenue reaching RMB 5.8 million by June 30. Going forward, the company’s cancer screening revenue scale is expected to expand further, driven by its gastric cancer screening offerings.

In terms of gross profit margin, Meinian Gene’s gross profit margins were 43.7%, 63.4%, 72.0%, and 66.5% in 2018, 2019, 2020, and the first half of 2021, respectively. In 2020, the gross profit margin for the company’s consumer-grade genetic testing projects was 69.8%, and that for cancer screening projects was 80.5%, both exceeding the industry average.

In terms of downstream sales channels, as of June 30, 2021,MeinGene has partnered with over 1,300 medical institutions across more than 300 cities in China,In addition to the more than 500 medical institutions of Meinian Onehealth, a strategic partner of the company, Meiyin has also established in-depth collaborations with over 800 Grade III Class A hospitals, public hospitals, insurance companies, and e-commerce platforms, forming a comprehensive sales network capable of providing customized services for diverse scenarios.

As technologies gradually mature and products emerge in rapid succession,Sales and channel capabilities are the core competitiveness of consumer-grade genetic testing and cancer screening companies,Meiyin Gene’s strong sales and channel capabilities have been instrumental in securing its advantageous market position.

In the field of preventive medicine, hospitals, third-party health examination centers, and health management centers are all establishing a closed-loop system ranging from preventive screening to health management.Genetic testing products are precisely the essential tools needed to achieve this goal.

Cost-effectiveness, strong brand reputation, superior service capabilities, and a diverse product portfolio are key factors evaluated when selecting genetic testing partners across various preventive medicine scenarios. Meiyin Genetics has earned high recognition from numerous medical institutions due to its leading advantages in product diversity, cost control, delivery capability, and customized pre- and post-sales services.

An expert from a Grade 3A hospital stated: “Meiyin Genetics offers a diverse portfolio of products covering multiple high-incidence diseases, delivers reports rapidly, and provides comprehensive after-sales service, earning positive feedback from patients. As an increasing number of patients proactively choose genetic testing products, Grade 3A hospitals are more inclined to collaborate with leading enterprises like Meiyin Genetics.”

A person in charge at a health checkup center stated, “Genetic testing is no longer a ‘niche high-end’ service at our center. Many corporate health checkup coordinators proactively consult us about genetic testing programs. All of our health checkup packages include genetic testing products from Meiyin Genes.”

Mr. Zhang, a customer, also provided feedback to VCBeat: “I developed hypertension in my thirties. I didn’t know the cause or why it occurred at such a young age. Later, through genetic testing, I discovered that I have a defective folate gene, which prevents me from obtaining sufficient folate through a normal diet, thereby leading to hypertension. Only then did I identify the root cause of my condition. Now, I place great emphasis on folate supplementation.”

Based on the feedback from VCBeat's market research,Genetic testing has shown a trend toward universal adoption.. In the United States, the penetration rate of consumer-grade genetic testing has reached 8.8%, and the penetration rate of colorectal cancer screening has reached 60.1%. With a significantly larger population base, China is on the verge of explosive growth in the fields of consumer-grade genetic testing and cancer screening.The Era of Affordable Genetic Testing Is Approaching。

Amid the rising tide of preventive medicine and health management, Meiyin Gene will strengthen its competitive moat in the consumer-grade genetic testing and cancer screening sectors by enhancing brand image, building diversified sales channels, continuously driving product commercialization, and developing automated operational systems.

We believe that industry leaders like Meiyin Gene will continue to deliver impressive results, building a globally leading platform for consumer-grade genetic testing and cancer screening, and driving rapid industrial development.