Breaking Down Novogene Co., Ltd. Financial Health: Key Insights for Investors

Born in Zhongguancun Life Science Park in March 2011 to fuse advanced molecular biotechnology with high‑performance computing, Novogene has transformed into a global genomics services provider-listing on the Shanghai STAR Market in April 2021 under 688315.SS and seeing its shares leap 119.44% to RMB 28.00 on debut as market value topped RMB 10 billion; the company has since partnered on over 600 SCI publications (total impact factors >4,270), served more than 4,000 customers across roughly 70 countries, expanded to 2,202 employees (Dec 2024) and a global lab/offices network, and reported 2024 financials of 2.11 billion yuan in revenue and 196.79 million yuan in net profit with a 43.7% gross margin-while remaining publicly traded with a diversified shareholder base, a c.5.43 billion yuan market cap as of Oct 2025, recent major‑shareholder reductions of 8.078 million shares (1.94% of total), R&D investment (7.54% of operating revenue in 2020), CAP/ISO‑aligned quality systems, and revenue streams spanning whole‑genome sequencing, transcriptomics, clinical diagnostics and biopharma services that underpin its operations and future growth prospects

Novogene Co., Ltd. (688315.SS): Intro

History

• Founded: March 2011 in Zhongguancun Life Science Park, Beijing.
• Scientific output: By October 2020, published over 600 SCI articles with collaborators; accumulated total journal impact factors exceeding 4,270.
• Public listing: Listed on the Shanghai Stock Exchange STAR Market in April 2021 under ticker 688315.SS.
• IPO market reaction: On first trading day stock rose 119.44% to RMB 28.00 per share; market capitalization exceeded RMB 10 billion.

Ownership & Corporate Structure

• Listed company: Publicly traded on SSE STAR Market (688315.SS), subject to China securities regulations and STAR Market disclosure rules.
• Shareholder base: Mix of institutional investors, corporate stakeholders and public retail investors following the April 2021 listing (detailed ownership percentages vary with market trades and regulatory filings).

Mission & Strategic Focus

• Mission: Enable advances in life sciences and improve human health through genomics-driven services and computational biology.
• Core capabilities: High-throughput sequencing, bioinformatics analysis, clinical genomics, and data-driven research services.
• R&D emphasis: Publishing in peer-reviewed journals, collaborating with research institutions, and expanding clinical and commercial applications of sequencing.

How It Works - Service and Operational Model

• Service offering: Sample processing, sequencing (short- and long-read), library preparation, bioinformatics pipelines, and reporting for research and clinical customers.
• Operational flow:
  • Sample intake and QC
  • Library prep and sequencing on in-house platforms
  • High-performance computing for alignment, variant calling and downstream analyses
  • Deliverables: raw data (FASTQ), processed files (BAM/VCF), interpretation reports and consulting
• Partners and customers: Academic institutions, pharmaceutical and biotech companies, hospitals and diagnostic labs.

How Novogene Makes Money - Revenue Streams

• Sequencing services: Fee-for-service high-throughput sequencing projects (research and clinical).
• Bioinformatics and data analysis: Paid pipelines, custom analyses, interpretation and secondary analyses.
• Product sales and reagents: Proprietary kits and consumables (where applicable) and instrument partnerships.
• Collaborative research and contracted R&D: Joint projects, co-development and milestone/licensing arrangements.

Key Financial and Operational Metrics (Selected)

Competitive Position & Growth Drivers

• Competitive advantages: Integrated sequencing + bioinformatics, established publication record, and STAR Market capital access.
• Growth levers: Expansion of clinical services, partnerships with pharma/biotech, geographic expansion, and increased uptake of genomics in healthcare.

Novogene Co., Ltd. (688315.SS): History

• Public listing: Shanghai Stock Exchange, ticker 688315.SS.
• Core business evolution: sequencing services, contract research, clinical genomics, and bioinformatics.
• Institutionalization: growing proportion of institutional and retail investors since IPO.

• Listed public company with a mixed shareholder base of institutions and individuals.
• In July 2025, major shareholders Zhiyuan Hegu and Novogene Hegu sold a combined 8.078 million shares, equal to 1.94% of total share capital - a strategic adjustment in ownership.
• Market capitalization and stock performance are sensitive to market conditions and investor sentiment; the Oct 2025 market cap was about ¥5.43 billion.

Novogene Co., Ltd. (688315.SS): Ownership Structure

• Mission: Become a global leader in genetic science and technology products and services, advancing life science research and human health.
• Quality & Compliance: Operates under CAP and ISO standards for laboratory and data processes to guarantee reproducibility and regulatory alignment.
• Comprehensive Solutions: Offers whole genome sequencing, targeted panels, exome, transcriptomics, epigenomics, single‑cell sequencing, and clinical diagnostics.
• Innovation: Developed an approved Class III medical device for tumor detection (State Food and Drug Administration approval in 2018).
• Global Reach: Serves over 4,000 customers in approximately 70 countries and regions, including academic labs, hospitals, CROs, and pharma companies.
• Operational Focus: Continuous improvement of sequencing platforms and management processes to enhance automation, shorten sequencing cycles, and improve data quality.

• Primary revenue streams: genomic sequencing services (research & clinical), genomics reagents & instruments, and bioinformatics/analysis services.
• Pricing mix: project‑based fees for large sequencing projects, unit pricing for clinical tests, and long‑term contracts with pharma/CRO partners.
• Scalability: revenue scales with utilization of in‑house sequencing capacity and sale of higher‑margin clinical diagnostics and proprietary assays.

Novogene Co., Ltd. (688315.SS): Mission and Values

• Technology backbone: Novogene runs high-throughput NGS platforms (including short-read and long-read systems), integrating automated library preparation, sequencers, and scalable on-premises/cloud data pipelines to deliver raw and analyzed genomic data.
• Service scope: The company provides whole genome sequencing (human, animal, plant, microbe), targeted sequencing, exome sequencing, transcriptomics (RNA‑seq), epigenomics, single-cell sequencing, metagenomics, and clinical diagnostic assays.
• End-to-end workflow: standardized sample QC → library prep → sequencing → bioinformatics (alignment, variant calling, annotation) → data delivery and storage, with optional downstream analysis and interpretation packages.
• Data management: supports petabyte-scale storage, long-term archival, and secure data transfer compliant with data protection and clinical privacy requirements.

• Laboratories & experimental bases: Beijing, Tianjin, Nanjing, UK, Singapore - multiple sequencing centers optimized for research and clinical workflows.
• Global offices: Hong Kong, United States, United Kingdom, Singapore, Netherlands, Japan, Thailand - supporting international project management and customer engagement.
• Team composition: interdisciplinary teams of molecular biologists, geneticists, bioinformaticians, clinical scientists, and software engineers, with many staff recruited from top universities in China and overseas.
• Quality management: unified, traceable SOPs across labs, ISO-like quality controls, and multiple QC checkpoints to ensure data accuracy and reproducibility.

• R&D intensity: R&D expenditure was 7.54% of operating revenue in 2020, reflecting sustained investment in assay development, automation, and bioinformatics platforms.
• Continuous innovation: investments target improved throughput, cost-per-sample reduction, expanded clinical assay validation, and AI-enhanced variant interpretation.

• Sequencing services: primary revenue from fee-for-service sequencing (WGS, WES, RNA‑seq, microbial genomics) charged per sample or per gigabase.
• Clinical diagnostics: revenue from validated diagnostic panels, clinical lab testing, and contract research for hospitals/diagnostic partners.
• Large-scale projects & partnerships: multi-year contracts with academic consortia, biopharma, agricultural groups, and government population genomics initiatives.
• Bioinformatics & data products: value-added analytics, custom pipelines, data interpretation reports, and long-term storage/subscription services.
• Instrument & reagent collaborations: partnerships and supply agreements with platform vendors and consumable suppliers (revenue contribution variable).

• Standardization: laboratories execute unified SOPs for sample handling, library prep, sequencing, and analysis to ensure traceability and reproducibility.
• QC metrics: routine use of metrics such as Q30 rates, coverage uniformity, mapping rates, duplicate rates, and contamination screening.
• Data security: encrypted transfer, controlled access, and secure long-term storage aligned with client confidentiality and regulatory expectations for clinical data.

Novogene Co., Ltd. (688315.SS): How It Works

• Primary client segments: research universities and scientific institutes, hospitals and clinical laboratories, pharmaceutical and biopharma R&D, agricultural and breeding companies.
• Core service lines: whole genome sequencing (WGS), exome sequencing, transcriptomics (RNA-seq), epigenomics (methylation), single-cell sequencing, metagenomics, clinical diagnostics and companion diagnostics, and biopharma services (GLP/CLIA-like workflows, biomarker discovery).
• Geographic footprint: domestic China labs plus international customers via export of sequencing services and local subsidiaries/partners for clinical work and sample logistics.

• Client engagement & protocol design - requirements, sample types, turnaround time, regulatory/clinical needs.
• Sample receipt & QC - standardized acceptance criteria, nucleic acid extraction or client-supplied extracts, pre-sequencing QC metrics.
• Library preparation & sequencing - use of Illumina/other high-throughput platforms, automated library prep to scale throughput and lower per-sample cost.
• Bioinformatics & data delivery - primary basecalling, alignment, variant calling, expression quantification, custom pipelines, report generation.
• Post-project support - interpretation, follow-up analyses, data storage, and potential CRO services for downstream validation.

• Service fees for sequencing and analyses - pricing varies by throughput, coverage depth, and customization (e.g., WGS vs targeted panels).
• Recurring revenue from institutional customers - long-term contracts with research centers, hospitals, and pharma for drug discovery and clinical testing pipelines.
• Value-added bioinformatics and report services - higher-margin analyses such as clinical interpretation, biomarker discovery, and regulatory-compliant testing.
• Biopharma/CRO projects - integrated projects for drug development, preclinical/clinical sample processing, and companion diagnostic support.
• Data storage, reanalysis, and licensing - ancillary revenue from long-term data hosting and proprietary analytic modules.

• High-throughput sequencing services (WGS, RNA-seq, targeted panels) drive core volume; scale enables lower fixed-cost per sample and improved gross margins.
• Clinical and regulated testing commands premium pricing due to stricter QC, accreditation, and reporting requirements.
• Biopharma/CRO projects typically yield higher margins through multi-phase contracts and bundled services (wet lab + bioinformatics + advisory).
• Operational efficiency - automation, centralized procurement of consumables, and optimized pipeline throughput - contributed to the 43.7% gross margin in 2024.

• Market demand - research funding cycles, expansion in clinical genomics adoption, and pharma R&D budgets directly influence volumes.
• Technological advances - newer sequencing chemistries, longer reads or cheaper per-base costs can pressure pricing but also enable new services.
• Global expansion and partnerships - international client acquisition and localized clinical capabilities increase addressable market but require regulatory compliance and capital investment.
• Supply chain & consumable costs - reagent and instrument pricing affect gross margin volatility; scale and long-term supplier agreements mitigate risk.

Novogene Co., Ltd. (688315.SS): How It Makes Money

• Customer base: >4,000 customers across ~70 countries and regions, supporting diversified service demand.
• Service mix: Research sequencing, clinical sequencing, bioinformatics pipelines, custom assay development, and sample processing.
• Operational leverage: Global lab network expansion and automation systems that reduce per-sample costs and raise throughput.

• Revenue growth outlook 2025: Accelerated growth expected due to recovery in demand and continued global lab expansion.
• Margin drivers: Automation and standardized workflows anticipate higher gross margins and improved cost structure in 2025.
• Profitability dynamics: 2024 showed resilience (net profit +10.52%); Q1 2025 margin projection (7.19%) reflects transitional investments and efficiency gains.