Analysis Report on Gene+OncoBacter's Capital Pressure

Based on public information, Gene+OncoBacter, a precision oncology company co-founded by Dr. Yi Xin and Dr. Yang Ling, former executives of BGI, is currently facing severe capital pressure. The following is a systematic analysis from multiple dimensions:

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Gene+OncoBacter was founded in 2015 by

, then COO of BGI and Vice President of BGI Research Institute, and , Head of BGI’s Clinical Testing Center and General Manager of Tianjin BGI [4]. Focused on the precision oncology field, the company has laid out the entire tumor prevention and treatment chain based on high-throughput sequencing (NGS) testing and a tumor gene big data platform, building four business segments: clinical testing services, medical device manufacturing, scientific and technological cooperation services, and tumor prevention and treatment services [2].

In terms of equity structure, BGI currently holds a

in Gene+OncoBacter. Other shareholders include well-known institutions such as Aier Healthcare (1.41%), HG Capital, CCB Capital, and Fortune Venture Capital [1]. Founder Dr. Yi Xin and his concerted parties hold 36.01% of the shares, and the post-money valuation after Series D financing reached [1].

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Fiscal Year	Operating Revenue	Net Profit Attributable to Parent	Adjusted Net Profit
2022	RMB 1.815 billion	RMB 372 million	-
2023	RMB 473 million	RMB 54 million	-RMB 300 million
2024	RMB 557 million	-RMB 424 million	-RMB 88 million
H1 2025	RMB 285 million	-RMB 414 million	-RMB 48 million

Benefiting from the nucleic acid testing boom during the pandemic, the company’s revenue reached a peak of RMB 1.815 billion in 2022, but has since plummeted. Revenue dropped sharply to RMB 473 million in 2023, only

of that in 2022; although it recovered slightly to RMB 557 million in 2024, this was only 30% of the peak level [1].

Gene+OncoBacter’s losses mainly stem from two factors:

1. Impact from Fair Value Changes of Financial Liabilities
   : In 2022 and 2023, financial liabilities brought book gains of RMB 267 million and RMB 356 million respectively to the company, masking its actual operational pressure at that time. However, since 2024, this has turned into huge losses, with such losses reaching as high as
   RMB 362 million
   in H1 2025, directly pushing up the current period’s loss [1].

2. Stagnant Growth of Core Businesses
   :
   • Precision diagnosis solutions (accounting for 77.7% of total revenue) generated RMB 222 million in revenue in H1 2025, an increase of only RMB 21 million compared to the same period in 2024
   • Growth in clinical research and transformation business has stagnated
   • The drug R&D enabling business has shrunk year-on-year (only RMB 13 million in H1 2025) [1]

As of H1 2025, the company’s book cash is only

, while short-term loans amount to . Its cash reserves can , putting it at severe liquidity risk [1]. On the eve of submitting its IPO application, the company urgently secured led by the Kechuang Yinzhi Fund of Yuecheng District, Shaoxing, and the Beijing Changping Industrial Development Investment Fund, among others, to ease capital pressure [1].

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In 2025, the company’s marketing expense ratio is as high as

, and the channel agent model brings high marketing costs. The growth of channel agents is restricted by external testing policies and peer competition, with slow expansion: only were added from the end of 2024 to June 2025 [1].

Although the company has adopted cost-cutting measures:

• R&D expenses were reduced from RMB 180 million in 2023 to RMB 117 million in 2024, and further dropped to RMB 62.78 million in H1 2025
• Administrative expenses were reduced from RMB 141 million in 2023 to RMB 97.16 million in 2024, and stood at RMB 40 million in H1 2025

However, the narrowing of operating losses is limited: the full-year operating loss was RMB 300 million in 2023 → RMB 45.86 million in H1 2025, and the room for cost-cutting is approaching its limit [1].

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The company’s core revenue is highly dependent on precision diagnosis solutions, which still accounted for

of total revenue in H1 2025. New growth engines (including MRD testing and AI-enabled businesses) are not yet fully mature, and the business structure needs optimization [1].

The channel sales model has issues with price system chaos, including competition between direct sales and channels, and among channels, which affects gross profit margin and brand value [1].

Gene+OncoBacter is the third domestic tumor gene testing company to sprint for a Hong Kong IPO following HaploX and Geneseeq, and competition in the track is fierce. The industry is transforming from the high-marketing-cost LDT model to localization and IVD productization, putting the company under multiple pressures such as registration application and channel expansion [3].

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Facing capital pressure, after completing RMB 300 million in Series D financing in November 2025, the company

, sprinting for a Hong Kong IPO [1][3].

The raised funds will be used for:

• Innovative R&D of products such as tumor large panel gene testing and early tumor screening
• Promoting the R&D and listing application of more blockbuster products in the pipeline
• Strengthening collaborative development of new drugs with innovative pharmaceutical companies in the oncology field

However, against the backdrop of a sluggish capital market, coupled with sustained losses and a cash flow crisis, there remains significant uncertainty as to whether the IPO will succeed and effectively ease the company’s capital pressure [3].

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The capital pressure faced by Gene+OncoBacter is

:

Type of Pressure	Specific Performance
Liquidity Pressure	Cash of RMB 96 million vs. short-term loans of RMB 140 million
Profitability Pressure	Sustained losses since 2024, with over RMB 400 million in losses in the first half of the year
Revenue Pressure	Revenue plummeted from RMB 1.8 billion to RMB 560 million, a drop of over 70%
Cost Pressure	Marketing expense ratio exceeds 50%, eroding profit margins
Competition Pressure	Crowded industry track, intensified competition from leading players

Founded by former BGI executives, Gene+OncoBacter is undergoing drastic adjustments from benefiting from the pandemic boom to facing industry reshuffling. Whether it can successfully break through via a Hong Kong IPO will depend on whether it can achieve substantive breakthroughs in product registration, market expansion, and cost control.

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[1] Former BGI Executives Lead Gene+OncoBacter to Hong Kong IPO: Sustained Losses After Shifting from Nucleic Acid Testing to Tumor Diagnosis (https://4g.stockstar.com/detail/IG2026011000001160)

[2] Shenzhen BGI Co., Ltd. Prospectus for Private Placement of Shares (https://www.bgi.com/wp-content/uploads/2020/11/华大基因：向特定对象发行股票募集说明书.pdf)

[3] Behind Gene+OncoBacter’s IPO: Coexistence of Challenges and Opportunities (https://zhuanlan.zhihu.com/p/1992618230515271412)

[4] I Voluntarily Gave Up Over RMB 100 Million in Stock Options to Start a Business (https://finance.sina.com.cn/tech/it/2022-07-30/doc-imizmscv4143529.shtml)