How can a company sustain a market valuation of 34 billion yuan when its actual controller is placed under detention?
Shenzhen New Industries Biomedical Engineering Co.,Ltd. (SZSE: 300832), a leading player in the in-vitro diagnostics sector, recently faced this situation. The company has clarified that the controller has not been involved in daily operations for many years and has subsequently announced a share buyback plan.
An Unexpected Event for the Leader
In July, the company announced that its actual controller, Weng Xianding, had been placed under detention according to a notice from a relevant supervisory commission. The company responded by stating it has a sound organizational structure and standardized governance system, with all directors and senior executives performing their duties normally. It emphasized that this matter does not involve the company and will not significantly impact its production, operation, or management.
Chairman Rao Wei further clarified that the specifics are unclear but confirmed the issue is personal and unrelated to company business. He highlighted that Weng Xianding has not participated in the company's operations for two decades. Weng, a former official who later founded New Industries Investment, introduced Dr. Rao Wei to take over management when the company encountered bottlenecks, with Weng himself focusing on financial support. Since the company's listing on the ChiNext board in 2020 and the expiration of Weng's board term the following year, he has held no position within the company.
Currently, operational decisions are controlled by Chairman Rao Wei's team. Despite the incident, the company proceeded with a share buyback, reflecting its position as the highest-valued company in the in-vitro diagnostics segment, with a market cap of approximately 34 billion yuan, compared to Autobio Diagnostics Co., Ltd.'s 18 billion yuan.
Interestingly, the performance gap between the two is not vast. In 2025, their revenues were 4.577 billion yuan and 4.226 billion yuan, with net profits of 1.62 billion yuan and 1.068 billion yuan, respectively. The key differentiator in their valuations lies in their strategic paths.
Shenzhen New Industries Biomedical has focused entirely on the fully automated chemiluminescence field and actively pursued overseas growth. In contrast, Autobio Diagnostics has adopted a multi-track, domestic channel-focused strategy, developing various business lines and using mature operations to fund new R&D.
Overseas Expansion Validated
The company's international expansion efforts span over a decade. Initially focused on distributor exports, it faced numerous challenges, including high certification barriers in developed markets and pricing pressures.
A turning point came in 2018 with a deep organizational restructuring. The company established a three-tier management system, created an independent overseas business division, and built specialized global teams for registration, academia, supply chain, and localized service, setting up legal entities in 16 countries.
The core strategy shifted from short-term distributor volume to building its own overseas legal entity system to control end customers. Despite stringent certification processes lasting 3-5 years for its high-risk IVD products in markets like the US and EU, the company secured FDA and EU IVDR certifications through sustained investment.
This strategic bet has gradually paid off. In 2025, overseas revenue grew by 19.16%, accounting for over 44% of total revenue. Driven by increased instrument installations, overseas chemiluminescence reagent sales surged by 43.57%.
Meanwhile, the domestic market has become increasingly competitive, with pricing pressures from centralized procurement and payment reforms. In 2025, the company's domestic revenue fell by 9.82% to 2.564 billion yuan, with reagent sales dropping by 13.77%. Autobio Diagnostics also saw an 8.46% decline in domestic revenue to 3.757 billion yuan, as it remains focused on the domestic market through acquisitions and industrial park development.
Currently, the overseas expansion appears successful, allowing the company to operate with a lighter financial load. Its debt ratio is below 10%, covered by operating cash flow, and it maintains high dividends and share buybacks without further financing since its IPO.
The company's accounts receivable turnover days were 76.3 in 2025, shorter than peers, supported by prepayment models overseas and a high-end domestic client base.
However, the high market valuation does not imply a flawless path. The company's business remains relatively concentrated in the chemiluminescence segment. Furthermore, domestic market uncertainties present ongoing challenges for future operations and capital allocation.
As of 2025, the company held 997 million yuan in cash and had over 1.7 billion yuan in entrusted wealth management products, with investment income and fair value changes contributing 57 million yuan and 20 million yuan, respectively.
Ultimately, the detention incident may not shake the company's operational foundation. The logic supporting its high valuation is the rapid growth of its overseas business. Yet, the uncertainty in the domestic market remains a common test for the entire industry.
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