Genetron Holdings Ltd (GTH) 2022 Q1 法說會逐字稿

Good morning and thank you for standing by. Welcome to the First Quarter 2022 Genetron Health Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session.

早上好，感謝您的支持。歡迎參加泛生子2022年第一季度財報電話會議。此時，所有參與者都處於只聽模式。演講者演講結束後，將進行問答環節。

(Operator Instructions). Please be advised that today's conference is being recorded.

（操作員說明）。請注意，今天的會議正在錄製中。

I would now like to hand the conference over to your speaker today, Mr. Evan Xu, CFO at Genetron Health. Please go ahead.

現在我想把會議交給今天的演講者，泛生子首席財務官徐文先生。請繼續。

Hello everyone, and welcome to Genetron's First Quarter 2022 Earnings Conference Call. The Company's earnings release was issued earlier today and is available on the Company's IR Website.

大家好，歡迎參加泛生子2022年第一季度收益電話會議。該公司的收益報告於今天早些時候發布，可在公司的投資者關係網站上查閱。

During this call, the company will be making some forward-looking statements regarding future events and results. These statements are made under the Safe Harbor provision of the US Private Securities Litigation Reform Act of 1995.

在這次電話會議中，該公司將就未來事件和結果發表一些前瞻性聲明。這些聲明是根據 1995 年美國私人證券訴訟改革法案的安全港條款作出的。

Statements that are not historical facts including statements about Genetron Health's beliefs and expectations are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Further information regarding these and other risks is included in Genetron Health's filings with the SEC.

非歷史事實的陳述，包括有關泛生子信念和期望的陳述，均為前瞻性陳述。前瞻性陳述涉及固有風險和不確定性。有關這些風險和其他風險的更多信息包含在泛生子向 SEC 提交的文件中。

All information provided today is as of the date of this call and Genetron Health does not undertake any obligation to update any forward-looking statements except as required under applicable law. With respect to any non-IFRS measures discussed during today's call, the company's reconciliation information related to those measures can be found in the earnings release issued earlier today.

今天提供的所有信息均截至本次電話會議之日，泛生子不承擔更新任何前瞻性聲明的義務，除非適用法律要求。對於今天電話會議中討論的任何非國際財務報告準則措施，該公司與這些措施相關的調節信息可以在今天早些時候發布的收益報告中找到。

Allow me to introduce the management team on the call today. Sizhen Wang, co-founder, Chairman and the CEO of Genetron Health, will discuss recent business updates and upcoming catalysts. And I will provide financial highlights related to the unaudited first quarter results outlined in today's release as well as our outlook for 2022.

請允許我在今天的電話會議上介紹一下管理團隊。泛生子聯合創始人、董事長兼首席執行官王思震將討論近期業務動態和即將推出的催化劑。我將提供與今天發布的未經審計的第一季度業績相關的財務要點以及我們對 2022 年的展望。

Following management's prepared remarks, we will open up the call to questions. During the Q&A session, our co-founder and Chief Scientific Officer, Dr. Hai Yan; Chief Technology Officer, Dr. Yuchen Jiao; and Chief Medical Officer, Dr. Yun-Fu Hu will also be available to answer questions.

在管理層準備好發言後，我們將開始提問。在問答環節，我們的聯合創始人兼首席科學官海燕博士；首席技術官焦宇辰博士；首席醫療官胡云福博士也將回答問題。

With that said, I would now like to turn the call over to Mr. Sizhen Wang. Sizhen, please go ahead.

話雖如此，我現在想把電話轉給王思振先生。思珍，請繼續。

Thank you, Evan. Hello everyone. Thanks for joining our First Quarter 2022 Earnings Conference Call. I would like to direct you to the supplemental earnings presentation on our Investor Relations website and begin on slide 2.

謝謝你，埃文。大家好。感謝您參加我們的 2022 年第一季度收益電話會議。我想引導您訪問我們投資者關係網站上的補充收益演示，並從幻燈片 2 開始。

As a leading provider of precision oncology product services in China, our comprehensive portfolio covers the entire spectrum of cancer management from early screening and therapy selection to MRD monitoring and the development of CDx with biopharma companies. In each of the segment, we are increasing adoption and penetration of our products.

作為中國領先的精準腫瘤產品服務提供商，我們全面的產品組合涵蓋了從早期篩查和治療選擇到 MRD 監測以及與生物製藥公司合作開發 CDx 的整個癌症管理領域。在每個細分市場中，我們都在提高我們產品的採用率和滲透率。

Turning to slide 4, the first quarter was very productive for Genetron. We continue to demonstrate the strength and increase awareness for our precision oncology platform. The recent highlights include a new CDx collaboration agreement with Hutchmed for their ORPATHYS, drug for nonsmall cell lung cancer using our marketed 8-gene lung cancer assay, receiving the CE mark of the Seq-MRD kit for the detection of hematologic cancers as well as FusionScan Plus which uses integrated DNA and RNA as templates for genetic alteration detection. A peer-reviewed publication of Mutation Capsule's potential in MRD assay development in Clinical and Translational Medicine, as well as 17 clinical data presentations at the American Association for Cancer Research Annual Meeting.

轉向幻燈片 4，第一季度泛生子非常富有成效。我們繼續展示我們的精準腫瘤學平台的實力並提高人們的認識。最近的亮點包括與Hutchmed 就其ORPATHYS 達成新的CDx 合作協議，該藥物使用我們已上市的8 基因肺癌檢測來治療非小細胞肺癌，獲得了用於檢測血液癌症的Seq-MRD 試劑盒的CE 標誌，以及FusionScan Plus 使用整合的 DNA 和 RNA 作為基因改變檢測的模板。關於 Mutation Capsule 在臨床和轉化醫學 MRD 檢測開發方面的潛力的同行評審出版物，以及美國癌症研究協會年會上的 17 項臨床數據演示。

In the first quarter of 2022, we grew diagnostics and monitoring revenue by 14% to RMB 99.5 million, of which IVD in-hospital sales rose 18%, driven by greater adoption of our sequencing platforms and assays including the Genetron S5 instrument and 8-gene Lung Cancer Assay. As we have mentioned, we plan to prioritize and further penetrate this reimbursed in-hospital market with our solutions.

2022 年第一季度，我們的診斷和監測收入增長 14%，達到 9,950 萬元人民幣，其中 IVD 院內銷售額增長 18%，這得益於我們的測序平台和檢測（包括泛生子 S5 儀器和 8-基因肺癌檢測。正如我們所提到的，我們計劃通過我們的解決方案優先考慮並進一步滲透這個報銷的醫院內市場。

We have gained solid traction here and increased the number of contracts of in-hospital partners to 31 at the end of the quarter and are excited to build on this momentum. On the LDT side of the business, we grew revenue by 14%, of which diagnostic test volume grew about 9% year-over-year in the first quarter.

我們在這裡獲得了堅實的牽引力，並在本季度末將住院合作夥伴的合同數量增加到 31 個，我們很高興能夠在此勢頭的基礎上再接再厲。在LDT業務方面，我們的收入增長了14%，其中第一季度診斷測試量同比增長約9%。

We continue to operate in a challenging environment where COVID outbreaks and the "Zero COVID" policies are affecting commercial opportunities across healthcare facilities. Relatively speaking within our portfolio, the LDT business was more heavily impacted by virus containment policy which caused declines in patient traffic to many of our LDT customers.

我們繼續在充滿挑戰的環境中運營，新冠疫情的爆發和“零新冠”政策正在影響整個醫療機構的商業機會。相對而言，在我們的投資組合中，LDT 業務受到病毒遏制政策的影響更大，導致我們許多 LDT 客戶的患者流量下降。

Our development services revenue more than doubled in the quarter. In addition to higher sequencing revenues, the growth was also a result of increasing biopharma partnerships and the meaningful progress we are making with each. Against the backdrop of a challenging operating environment, we are committed to forging ahead with our major pipeline assets that we expect will be key drivers for our future growth.

我們的開發服務收入在本季度增長了一倍多。除了更高的測序收入之外，增長也是生物製藥合作夥伴關係不斷增加以及我們與每個合作夥伴取得的有意義進展的結果。在充滿挑戰的經營環境的背景下，我們致力於推進我們的主要管道資產，我們預計這些資產將成為我們未來增長的關鍵驅動力。

So on slide 5, let me start off with our early screening segment. In November 2021, we initiated NMPA registration trial for our HCC early detection assay by beginning the enrollment for the trial of our methylation multi-marker PCR-based assay, HCCscan. Recall that this was a 5,000-patient trial in nine clinical sites, and we intend to select a few of these sites for our multi-omics NGS-based HCCscreen trial.

在幻燈片 5 上，讓我從我們的早期篩選部分開始。 2021 年 11 月，我們啟動了 HCC 早期檢測檢測的 NMPA 註冊試驗，開始招募基於甲基化多標記 PCR 的檢測 HCCscan 的試驗。回想一下，這是在 9 個臨床中心進行的 5,000 名患者試驗，我們打算選擇其中的一些中心進行基於多組學 NGS 的 HCCscreen 試驗。

As a result of COVID disruptions, the HCCscreen trial has been delayed and we now project to begin rolling subjects in third quarter. We continue to believe that this structure of both PCR and NGS tests is the best strategy to help the most patients and expand the addressable market for the assays.

由於新冠疫情的干擾，HCCscreen 試驗被推遲，我們現在預計在第三季度開始滾動受試者。我們仍然相信，PCR 和 NGS 檢測的這種結構是幫助大多數患者並擴大檢測的潛在市場的最佳策略。

There is a more established PCR infrastructure with rapidly available workflows in many hospitals and clinics in China. Based on the nucleic acid testing needs and associate government-led infrastructure built since COVID, PCR capabilities continue to increase across healthcare systems in China.

中國的許多醫院和診所都有更成熟的 PCR 基礎設施和快速可用的工作流程。基於核酸檢測需求和新冠肺炎疫情以來政府主導的基礎設施建設，中國醫療系統的 PCR 能力不斷增強。

Additionally, a few months ago, a DNA methylation and other genetic testing were added to some Beijing and other provincial insurance programs. This reimbursement established a benchmark price of around RMB 800 for methylation-based tests and around RMB 1,500 for NIPT NGS-based testing.

此外，幾個月前，北京和其他省份的一些保險項目還增加了 DNA 甲基化和其他基因檢測。此次報銷確定了甲基化檢測的基準價格為800元左右，NIPT NGS檢測的基準價格為1500元左右。

Based on these dynamics, we believe that adding a high-performing PCR-based assay would be commercially viable while also providing self-pay patients in lower-tier markets with a cost optimal solution. Overall, we are confident that we can deploy both in-hospital and central lab models to increase accessibility and efficiently penetrate the liver cancer early screening market.

基於這些動態，我們相信添加基於 PCR 的高性能檢測在商業上是可行的，同時也為低端市場的自費患者提供成本最優的解決方案。總體而言，我們有信心能夠部署院內和中心實驗室模型，以提高可及性並有效滲透肝癌早期篩查市場。

As for our HCCscreen plans in the U.S., we have started a confirmatory study with two medical institutions in the U.S. and may present the data at an upcoming conference. So beyond liver cancer, we have plans to develop multi-cancer products in the future.

至於我們在美國的HCC篩查計劃，我們已經與美國的兩家醫療機構開始了驗證性研究，並可能在即將召開的會議上公佈數據。因此，除了肝癌之外，我們未來還計劃開發多種癌症產品。

We have already shared some early retrospective CRC data during our last earning calls, showing over 91% of sensitivity and 95% specificity. We continue to expect to have CRC data published some time in 2022.

我們已經在上次財報電話會議中分享了一些早期回顧性 CRC 數據，顯示超過 91% 的敏感性和 95% 的特異性。我們仍然預計 CRC 數據將在 2022 年某個時候發布。

So turning to Slide 6. On the MRD side, recall that we have announced an exciting multiyear co-development agreement with AstraZeneca R&D China for an NGS-based personalized MRD tests for solid tumors in China. MRD testing has the potential to help in the clinical management for patients well before metastatic lesions grow to the size detectable by conventional methods such as MRI and CT scan.

現在轉向幻燈片 6。在 MRD 方面，請回想一下，我們已經宣布與阿斯利康中國研發中心達成一項令人興奮的多年共同開發協議，為中國的實體瘤提供基於 NGS 的個性化 MRD 測試。 MRD 檢測有可能在轉移病灶發展到 MRI 和 CT 掃描等傳統方法可檢測到的大小之前幫助患者進行臨床管理。

With this partnership, AZ plans to use this co-developed MRD test for China-specific solid tumor clinical trials that are designed to incorporate the use of NGS-based personalized MRD tests. The assay optimization is currently ongoing and expected to finish by end -- by year-end. Concurrently, we're also planning a pilot LDT launch in the second quarter and expect to expand to an official launch before year-end.

通過此次合作，AZ 計劃將這種共同開發的 MRD 測試用於中國特定的實體瘤臨床試驗，該臨床試驗旨在結合使用基於 NGS 的個性化 MRD 測試。檢測優化目前正在進行中，預計將在年底前完成。同時，我們還計劃在第二季度試行 LDT 啟動，並預計在年底前正式啟動。

So now moving to Slide 8. The assay would be developed based on Genetron's patented Mutation Capsule platform, a method for detecting mutation methylation of tumor-specific genes in ctDNA.

現在轉到幻燈片 8。該檢測將基於 Genetron 的專利 Mutation Capsule 平台開發，該平台是一種檢測 ctDNA 中腫瘤特異性基因突變甲基化的方法。

The Mutation Capsule platform enables multiple test analysis based on a single cfDNA sample, providing head-to-head comparisons between multiple MRD strategies such as personalized and non-personalized assays as shown in Slide 9 and 10, with some of the early data we generated from gastric rectal and liver cancer patients. The liver data was recently published in Clinical and Translational Medicine, demonstrating the technology's potential in MRD assay development.

Mutation Capsule 平台能夠基於單個 cfDNA 樣本進行多項測試分析，提供多種 MRD 策略之間的頭對頭比較，例如幻燈片 9 和 10 中所示的個性化和非個性化檢測以及我們生成的一些早期數據來自胃癌、直腸癌和肝癌患者。肝臟數據最近發表在《臨床和轉化醫學》雜誌上，展示了該技術在 MRD 檢測開發中的潛力。

The Mutation Capsule also allows more sensitive detection in low-yield cfDNA samples with higher conversion efficiency of cfDNA molecules. Beyond tumor-informed MRD assay, we're also exploring tumor naive MRD approach based on the same technology platform. We look forward to sharing more updates as these programs proceed.

Mutation Capsule 還可以在低產量 cfDNA 樣品中進行更靈敏的檢測，並具有更高的 cfDNA 分子轉換效率。除了腫瘤相關的 MRD 檢測之外，我們還在探索基於相同技術平台的腫瘤原始 MRD 方法。隨著這些計劃的進展，我們期待分享更多更新。

Currently, there are only a handful of companies in China that may have the capability to develop a high performing MRD assay. We continue to be optimistic about the MRD solid tumor market in China and in particular Genetron's competitive position after the AstraZeneca collaboration.

目前，中國祇有少數幾家公司有能力開發高性能 MRD 檢測方法。我們繼續看好中國MRD實體瘤市場，特別是泛生子與阿斯利康合作後的競爭地位。

On Slide 11, for Seq-MRD in hematological malignancies, our exclusive partnership with Fosun Pharma in China is progressing well. We have expanded our clinical launch in the second quarter. This assay is also generating many dialogues with biopharma owners and we anticipate a few more partners to sign on in the next few months.

在幻燈片 11 上，對於血液惡性腫瘤的 Seq-MRD，我們與復星醫藥在中國的獨家合作進展順利。我們在第二季度擴大了臨床啟動。該檢測還與生物製藥所有者進行了許多對話，我們預計未來幾個月將有更多合作夥伴加入。

Overall, we're pleased with continued support by the healthcare authorities of MRD testing in hematological malignancies in China. And we believe that our NGS-based Seq-MRD represents an innovative and differentiated solution.

總體而言，我們對中國醫療保健當局對血液惡性腫瘤 MRD 檢測的持續支持感到高興。我們相信，基於 NGS 的 Seq-MRD 代表了一種創新且差異化的解決方案。

So now turning to slide 12, moving on to discuss our biopharma services business. In the first quarter, we have signed on additional four biopharma partners, increasing the total now to 64 partners. We continue to maintain a strong pipeline as we have the opportunity to form partnerships through our key products, including Seq-MRD, Onco PanScan, FusionScan and others.

現在轉到幻燈片 12，繼續討論我們的生物製藥服務業務。第一季度，我們又簽約了 4 個生物製藥合作夥伴，目前合作夥伴總數達到 64 個。我們繼續保持強大的產品線，因為我們有機會通過我們的關鍵產品建立合作夥伴關係，包括 Seq-MRD、Onco PanScan、FusionScan 等。

So recently, we have announced our CDx partnership with Hutchmed for savolitinib in nonsmall cell lung cancer, using our already marketed 8-gene lung cancer IVD assay. As mentioned, our 8-gene lung cancer assays are already gaining very good traction in the IVD in-hospital use market.

最近，我們宣布與 Hutchmed 合作開發沃利替尼治療非小細胞肺癌，使用我們已經上市的 8 基因肺癌 IVD 檢測。如前所述，我們的 8 基因肺癌檢測方法已經在 IVD 醫院內使用市場中獲得了非常好的吸引力。

We're excited about this partnership as it is our second major CDx after our first one CStone for avapritinib, which has entered the NMPA priority review and approval process. In China, the trend of CDx demand is growing stronger, resulting from NMPA's increasing focus on genomic testing for innovative targeted immunotherapies.

我們對此次合作感到非常興奮，因為這是繼基石藥業的第一個 avapritinib 已進入 NMPA 優先審評審批流程之後，我們的第二個主要伴隨診斷項目。在中國，由於國家藥品監督管理局越來越關注創新靶向免疫療法的基因組檢測，伴隨診斷需求趨勢日益強勁。

Together with our CLIA lab in Maryland, we have excellent opportunities to work on cross-border trials and CDx developments. We anticipate continued strong growth in this business segment.

與我們位於馬里蘭州的 CLIA 實驗室一起，我們有絕佳的機會進行跨境試驗和伴隨診斷開發。我們預計該業務領域將持續強勁增長。

So now, I will turn the call over to our CFO, Mr. Evan Xu, to provide more details on our first quarter financials. Evan?

現在，我將把電話轉給我們的首席財務官徐埃文先生，以提供有關我們第一季度財務狀況的更多詳細信息。埃文？

Thank you, Sizhen. So please note that all numbers provided are in RMB terms and that all comparisons are made on a year-over-year basis.

謝謝你，思珍。因此，請注意，提供的所有數字均以人民幣計算，並且所有比較都是按年進行的。

Starting on slide 15. In the first quarter, our total revenue increased by 19.8% to110 million, from RMB 92 million in the same period of 2021. Diagnosis and monitoring revenue increased by 14% to RMB 100 million from RMB 87 million in the same period of 2021.

從幻燈片 15 開始。第一季度，我們的總收入從 2021 年同期的 9200 萬元增長 19.8% 至 1.1 億元。診斷和監測收入從 2021 年同期的 8700 萬元增長 14% 至 1 億元。 2021 年期間。

LDT revenue increased by 13.5% to RMB 82 million during the first quarter. LDT diagnostic tests sold in the first quarter increased by 9% to approximately 5,560 units. We are pleased with our early screening sales uptake as well, with continued support from all of our key collaborators.

LDT第一季度收入增長13.5%至人民幣8200萬元。第一季度 LDT 診斷測試銷量增長 9%，達到約 5,560 台。在我們所有主要合作者的持續支持下，我們對早期篩選的銷售情況也感到滿意。

Moving to slide 16. IVD revenue increased by 18% to RMB 18 million in the first quarter 2022 from RMB 15 million in the last year -- in the first quarter last year. The increase was mainly driven by sales of both Genetron S5 instrument as well as the 8-gene Lung Cancer Assay.

轉到幻燈片 16。2022 年第一季度 IVD 收入從去年第一季度的 1500 萬元人民幣增長 18%，達到 1800 萬元人民幣。這一增長主要是由泛生子 S5 儀器和 8 基因肺癌檢測試劑盒的銷售推動。

Revenue generated from development services increased by 117% to RMB 10.8 million in the first quarter this year from RMB 5 million in the same period of 2021. This was primarily driven by both the increase of sequencing and biopharma services revenues.

開發服務收入從2021年同期的人民幣500萬元增長117%至今年第一季度的人民幣1080萬元。這主要是由測序和生物製藥服務收入的增長推動的。

Moving to slide 17. Cost of revenue increased by 30% to RMB 49 million for the three months ended March 31, 2022, compared to RMB 38 million in same period of last year. As a result, gross profit increased by -- increased it to RMB 62 million in the first quarter this year from RMB 55 million in the same period of last year.

轉到幻燈片 17。 截至 2022 年 3 月 31 日止三個月，收入成本增加 30% 至人民幣 4900 萬元，而去年同期為人民幣 3800 萬元。受此影響，今年一季度毛利潤由去年同期的5500萬元增至6200萬元。

Gross profit margin was 56% for the first quarter this year, compared to 59% in the same period of last year. Specifically, gross margin for our LDT segment was 64% compared to 68% a year ago, primarily due to promotional activities related to HCCscan.

今年第一季度毛利率為56%，去年同期毛利率為59%。具體來說，我們的 LDT 部門的毛利率為 64%，而去年同期為 68%，這主要是由於與 HCCscan 相關的促銷活動。

We expect this impact to be temporary and these promotional activities will end in near term. For our IVD segment, gross margin was around 50% versus 34% in the prior year, thanks to higher consumable sales. Operating expenses increased by 48% to RMB 241 million for this quarter from RMB 164 million in the prior year.

我們預計這種影響是暫時的，這些促銷活動將在短期內結束。對於我們的 IVD 部門，由於消耗品銷量增加，毛利率約為 50%，而上一年為 34%。本季度運營費用從去年同期的人民幣 1.64 億元增長 48% 至人民幣 2.41 億元。

Operating expenses are broken out on slide 18 and are as follows: selling expenses increased by 52% to RMB 91 million in this quarter from RMB 60 million in the same period of 2021. Selling expenses as a percentage of revenue increased to 82% in this year -- in the first quarter this year from around 65% in 2021.

營業費用在幻燈片 18 中細分如下：本季度銷售費用從 2021 年同期的 6,000 萬元人民幣增加到 9,100 萬元人民幣，增長 52%。本季度銷售費用佔收入的百分比增至 82%今年——今年第一季度，2021 年這一比例約為65%。

The increase was primarily driven by increased headcount in the sales and marketing team to expand Genetron's core business including our early screening efforts. And that -- because of the -- partially because of the COVID impact, the revenue growth for this quarter has been affected.

這一增長主要是由於銷售和營銷團隊人數的增加，以擴大泛生子的核心業務，包括我們的早期篩查工作。部分由於新冠疫情的影響，本季度的收入增長受到了影響。

We expect the sales headcount to remain stable and the sales efficiency to improve in the quarters to come. Administrative expenses increased by 13% to RMB 50 million in this quarter from around RMB 45 million in 2021.

我們預計未來幾個季度銷售人員數量將保持穩定，銷售效率將有所改善。本季度管理費用增加 13%，從 2021 年的約 4500 萬元人民幣增至 5000 萬元人民幣。

Admin expenses as a percentage of revenue decreased to 46% in the first quarter from 48% in the prior year. R&D expenses increased by 59% to around RMB 80 million in the first quarter of 2022 from around RMB 50 million in the same period of last year. R&D expenses as a percentage of revenue also increased to 72% in this quarter compared to 54% last year.

第一季度管理費用佔收入的百分比從去年同期的 48% 下降至 46%。研發費用從去年同期的約5000萬元人民幣增長59%至2022年第一季度的約8000萬元人民幣。本季度研發費用佔收入的比例也從去年的 54% 上升至 72%。

The increase was driven by both higher R&D headcount as well as continued investments in core product development and clinical trial activities such as HCCscan. As a result, operating loss was RMB 180 million for this first quarter compared to RMB 109 million last year.

這一增長是由研發人員數量增加以及對核心產品開發和 HCCscan 等臨床試驗活動的持續投資推動的。因此，第一季度營業虧損為人民幣 1.8 億元，而去年同期為人民幣 1.09 億元。

On slide 19, net loss for the period was RMB 175 million compared to RMB 115 million for the first quarter of 2021. For non-IFRS net loss, this excludes share-based compensation expenses, fair value change, and other losses of financial instruments with preferred rights.

在幻燈片19 中，該期間的淨虧損為人民幣1.75 億元，而2021 年第一季度為人民幣1.15 億元。對於非國際財務報告準則淨虧損，這不包括股權補償費用、公允價值變動和其他金融工具損失具有優先權。

Non-IFRS net loss was RMB 164 million for this quarter compared to RMB 106 million in the prior year. Basic loss per ordinary share was RMB 0.38 for this first quarter compared to RMB 0.25 for the same period of 2021. For non-IFRS net loss, per ordinary share this quarter is RMB 0.35 and for the prior year was RMB 0.23.

本季度非國際財務報告準則淨虧損為人民幣 1.64 億元，而去年同期為人民幣 1.06 億元。第一季度每股普通股基本虧損為人民幣0.38 元，而2021 年同期為人民幣0.25 元。對於非國際財務報告準則淨虧損，本季度每股普通股基本虧損為人民幣0.35 元，上一年為人民幣0.23 元。

Diluted loss per ordinary share is equivalent to basic loss per ordinary share. We have cash and cash equivalents in the current financial assets at fair value through profit and loss at RMB 559 million as of March 31st, 2022.

每股普通股攤薄虧損相當於每股普通股基本虧損。截至2022年3月31日，我們以公允價值計量且其變動計入損益的流動金融資產中的現金和現金等價物為人民幣5.59億元。

Now moving to discuss our outlook for 2022, let's go to slide 20. In January, our LDT revenue actually grew rather strongly with a year-over-year growth of nearly 30%. However, the trend took a turn in the following months. In March, LDT revenue experienced a single-digit year-over-year decline as COVID cases were rising in Shanghai, Shenzhen and several parts of the country.

現在開始討論我們對 2022 年的展望，讓我們轉到幻燈片 20。1 月份，我們的 LDT 收入實際上增長相當強勁，同比增長近 30%。然而，這一趨勢在接下來的幾個月發生了轉變。 3月份，由於上海、深圳和中國部分地區的新冠病例上升，LDT收入同比出現個位數下降。

In April, we saw even more -- even deeper negative double-digit year-over-year decrease for our LDT revenue. Many of you may have heard about the severe COVID-related measures, in Shanghai in particular, that began at the end of March until actually very recently. Only until June 1st, basically one day ago, Shanghai starts to gradually open up.

4 月份，我們的 LDT 收入出現了更多、甚至更深的兩位數負同比下降。你們中的許多人可能聽說過從三月底開始直到最近才採取的與新冠病毒相關的嚴厲措施，尤其是在上海。直到6月1日，基本上一天前，上海才開始逐步開放。

As a result, it has been extremely difficult for us to conduct any activities in this particular city which has had a negative impact on our businesses, in particular, LDT revenues. Ongoing spread has been happening in Beijing and other cities and the mass testing continues.

因此，我們在這個特定城市開展任何活動都極其困難，這對我們的業務，特別是 LDT 收入產生了負面影響。北京和其他城市的疫情正在持續蔓延，大規模檢測仍在繼續。

In fact, our lab in Beijing where our headquarters is based is also participating in government-led COVID testing programs. While the situation is challenging for our operations, it has negatively impacted our business -- our core business volumes, we are very glad that Genetron could step up and take action against fighting COVID together with relevant government authorities.

事實上，我們總部所在的北京實驗室也參與了政府主導的新冠病毒檢測項目。雖然這種情況對我們的運營構成了挑戰，但它對我們的業務——我們的核心業務量產生了負面影響，但我們非常高興泛生子能夠與相關政府部門一起採取行動抗擊新冠肺炎疫情。

In addition to Shanghai and Beijing, fresh outbreaks in some of our key markets may continue to emerge. These flareups are addressed through the rigorous zero-COVID precautions which weigh on our ability to drive growth.

除上海和北京外，我們的一些主要市場可能會繼續出現新的疫情。這些突發事件是通過嚴格的零新冠預防措施來解決的，這些預防措施影響了我們推動增長的能力。

In regards to our financial guidance, in March, when we provided our 2022 revenue projection, we had anticipated that in challenging business environment would persist and had baked in a relatively conservative assumption. Further in May, we are seeing some positive signs of recovery.

就我們的財務指引而言，3月份，當我們提供2022年收入預測時，我們預計充滿挑戰的商業環境將持續存在，並採取了相對保守的假設。進入五月，我們看到了一些積極的複蘇跡象。

We hope we can catch up some of the losses in the second half of the year. Thus at this point, we are maintaining our revenue guidance to be around RMB 585 million to RMB 638 million or around 10% to 20% of growth compared to year 2021. We will closely monitor the COVID-19 trend and evaluate its impact to our business and provide updates in due course.

我們希望下半年能夠彌補一些損失。因此，目前我們將收入指引維持在5.85 億元人民幣至6.38 億元人民幣左右，即與2021 年相比增長10% 至20% 左右。我們將密切關注COVID-19 的趨勢，並評估其對我們的影響。業務並及時提供更新信息。

This concludes the discussion of our first quarter financial results. I will now turn the call back to Sizhen.

關於我們第一季度財務業績的討論到此結束。我現在將電話轉回給思珍。

Thank you, Evan. In closing, we're pleased with the success we have achieved both financially or operationally in the face of adversity related to COVID. I would like to emphasize the strong underlying long-term fundamentals of our business that position us very well to drive substantial growth through continued commercial, clinical and pipeline development execution.

謝謝你，埃文。最後，我們對面對新冠肺炎相關逆境時在財務和運營方面取得的成功感到高興。我想強調我們業務的強大的長期基本面，使我們能夠通過持續的商業、臨床和管道開發執行來推動大幅增長。

Shown on slides 22 and 23, we remain focused on the development of liquid biopsy-based solutions across the full-cycle cancer management, particularly in early screening, MRD and the CDx, while continuing to ramp up our commercialization efforts and grow our core business.

如幻燈片 22 和 23 所示，我們仍然專注於開發基於液體活檢的全週期癌症管理解決方案，特別是在早期篩查、MRD 和 CDx 方面，同時繼續加大商業化力度並發展我們的核心業務。

For our IVD in-hospital model, in addition to the expanding hospital partner base, we have also made good progress on the inclusion of the approved IVD kits into procurement systems and/or price lists in more than 20 provinces.

對於我們的院內體外診斷模式，除了擴大醫院合作夥伴基礎外，我們在將批准的體外診斷試劑盒納入20多個省份的採購系統和/或價目表方面也取得了良好進展。

For example, with our 8-gene lung cancer assay which represents as one of the most clinically important test for nonsmall cell lung cancer, we continue to believe that the government reimbursement inclusion would be -- could be established for certain regions in the next 12 to 24 months. This would represent a meaningful driver for increased penetration and market share.

例如，我們的 8 基因肺癌檢測是臨床上最重要的非小細胞肺癌檢測之一，我們仍然相信政府報銷範圍將在未來 12 年內針對某些地區建立。至 24 個月。這將成為提高滲透率和市場份額的重要驅動力。

In addition, as we can see on slide 24, we have a catalyst-rich pipeline over the next couple of years to create substantial opportunities for our organization. Over the past few years, our investments and expanding capabilities have positioned us as a leading player in this market and created significant long-term strategic value. Our organizational build-out is largely completed, and one of our priorities is also to improve operational excellence in order to improve margins and losses going forward.

此外，正如我們在幻燈片 24 中看到的，我們在未來幾年內擁有豐富的催化劑渠道，可以為我們的組織創造大量機會。在過去的幾年裡，我們的投資和不斷擴大的能力使我們成為該市場的領先者，並創造了重大的長期戰略價值。我們的組織建設已基本完成，我們的首要任務之一也是提高卓越運營，以改善未來的利潤和損失。

So, this concludes the prepared remarks portion of today's call, Operator, so we're now ready for questions.

那麼，今天電話會議準備好的發言部分就到此結束，接線員，我們現在準備好提問了。

Thank you. (Operator Instructions). Please stand by while we compile the Q&A roster.

謝謝。 （操作員說明）。我們正在整理問答名單，請稍候。

We have a question from Yang Huang with Credit Suisse. Your line is open.

我們收到了瑞士信貸銀行黃楊的提問。您的線路已開通。

Thanks, management, for giving me opportunity to ask question. So I have quickly two questions. First on 2Q performance, so I think you mentioned in March and also in April, we are seeing some revenue impact. I would like to understand what is going to be impacted to our margin for the second quarter, given lockdown and other situations? That's my first question.

謝謝領導給我提問的機會。所以我很快就有兩個問題。首先是第二季度的表現，所以我想你在三月份和四月份都提到過，我們看到了一些收入影響。我想了解，考慮到封鎖和其他情況，我們第二季度的利潤率會受到什麼影響？這是我的第一個問題。

You mean the magnitude of the impact or --

你指的是影響的大小或者——

Yes, yes, margin, yes.

是的，是的，保證金，是的。

Okay. So yes, first of all, in second quarter, as I mentioned that April was probably the worst month so far, given the hope that was really -- some of our key markets was deeply in the lockdown mode, in particular Shanghai and some Northeast provinces.

好的。所以，是的，首先，在第二季度，正如我所提到的，四月份可能是迄今為止最糟糕的一個月，因為我們的一些關鍵市場確實處於封鎖模式，特別是上海和東北地區的一些市場省份。

So actually, we saw a double digit, around 30% of decrease year-over-year for April. The good sign is that, in May we see some recovery, especially in Northeast markets. So all in all -- although Shanghai was still in a lockdown mode, right, for the entire May.

事實上，我們看到 4 月份同比下降了兩位數，約 30%。好跡像是，五月份我們看到了一些復甦，尤其是東北市場。總而言之，儘管上海整個五月仍處於封鎖狀態，對吧。

So all in all, for May, the situation was better compared to April but it's still negative double digit. So now, starting from 1st of June, we will try -- Shanghai is gradually recovering and we'll try our best to capture business opportunities and some pent-up demands in the CT. So hopefully, by end of second quarter which means June, we should -- we should have catch-up compared to last year in terms of LDT revenue.

總而言之，5月份的情況比4月份要好一些，但仍然是負兩位數。所以現在，從6月1日開始，我們會嘗試——上海正在逐漸恢復，我們會盡力抓住CT裡的商機和一些被壓抑的需求。因此，希望到第二季度末（即 6 月），我們應該在 LDT 收入方面趕上去年。

I think all-in-all, second quarter we -- pretty hit by the COVID in terms of volume and revenue. In terms of margin for LDT, I think that will have accordingly will be impacted as well, given a significant portion of the fixed cost remains unchanged. So, it's hard to say with a precise number but we'll have close eye on this.

我認為總而言之，第二季度我們在銷量和收入方面受到了新冠疫情的嚴重打擊。就 LDT 的利潤率而言，鑑於固定成本的很大一部分保持不變，我認為這也會相應​​受到影響。因此，很難說出確切的數字，但我們將密切關注這一點。

Yes, so --

是的，所以 -

Okay and that is true.

好吧，這是真的。

Yes, to add up on that, one thing is that we have -- over this COVID outbreaks in Beijing, we have -- we mentioned in the earnings call that we have started participating in [seven] of the government-led COVID testing programs.

是的，總而言之，有一件事是，我們在北京爆發的新冠肺炎疫情中，在財報電話會議上提到，我們已經開始參與[七個]政府主導的新冠病毒檢測項目。

So therefore, some of our essentially unused lab capacity due to the impact that the COVID has been leveraged to provide the COVID testing, which means that, that part what contribute to some of the revenues in Q2 as well as share, essentially some of the costs -- the fixed costs that Evan have just mentioned. So, that will serve as a stabilizing factors in terms of overall financial metrics for Q2.

因此，由於新冠病毒的影響，我們的一些實驗室能力基本上沒有被利用來提供新冠病毒測試，這意味著，這部分貢獻了第二季度的一些收入和份額，基本上是成本——埃文剛才提到的固定成本。因此，這將成為第二季度整體財務指標的穩定因素。

Yes, thanks. My second question is about our collaboration with AZ on the MRD program. So, can you give us some kind of more details on, let's say what kind of cancer type we want to target at first? And on the cost side, are we going to kind of share development costs with AZ in terms of revenue or profit in the future, are we going to also share with AZ? Thanks.

對了謝謝。我的第二個問題是關於我們與 AZ 在 MRD 項目上的合作。那麼，您能否給我們提供更多詳細信息，比如說我們首先要針對哪種癌症類型？在成本方面，我們是否會在未來的收入或利潤方面與 AZ 分擔開發成本，我們是否也會與 AZ 分擔？謝謝。

Yes, so this is obviously a very important collaboration that we have developed with biopharma partners, right, especially with AZ. So, as we discussed before in previous conversations, this is in fact a co-development partnership here, which means that both sides will invest into the development and the validation of these assays.

是的，這顯然是我們與生物製藥合作夥伴，特別是與 AZ 開展的非常重要的合作。因此，正如我們在之前的對話中討論的那樣，這實際上是一種共同開發夥伴關係，這意味著雙方將投資於這些檢測方法的開發和驗證。

And upon the completion of the validation of the personalized MRD in a technology platform under the test that AZ is committed to use this assay exclusively for their China-specific trials. And these assays, they intended to be used on the multi-cancer essentially is a pan-cancer personalized MRD assay.

在測試下的技術平台中完成個性化 MRD 驗證後，AZ 承諾專門將該檢測方法用於其針對中國的試驗。而這些檢測方法，他們打算用於多種癌症，本質上是一種泛癌個性化MRD檢測方法。

I see. But are we going to own the IP by ourselves or are the IP also going to join -- owned by us and AZ?

我懂了。但我們是否要自己擁有該 IP，還是該 IP 也將加入——由我們和 AZ 擁有？

Yes, so essentially, the IP of the technology platform itself is owned by us, right? So, in terms of the product, it's kind of like a joint ownership in certain cases. So, the commercialization upon -- so as I mentioned, upon the completion of the validation and development of this assay, will be kind of the two-folds, right.

是的，所以本質上，技術平臺本身的IP是我們擁有的，對嗎？因此，就產品而言，在某些情況下有點像共同所有權。因此，正如我所提到的，在完成該檢測的驗證和開發後，商業化將是雙重的，對吧。

First of all, AZ is committed to use this assay and pay for the service, essentially for the assay and the testing service on, again, exclusively on all their relative -- all their related China-specific trials. So, that's the first layer of the commercialization arrangement we have made.

首先，AZ 承諾使用該檢測並支付服務費用，主要是針對其所有相關的所有相關中國特定試驗的檢測和測試服務。所以，這是我們所做的商業化安排的第一層。

So, the other layer of the arrangement that is likely we will form a commercial partnership to promote this assay in a clinical setting. I mean -- when I say clinical setting I mean to serve the patients. So that commercial -- the collaboration details is actually to be first discussed and to be finalized. But the both sides are excited that we will be able to co-develop this assay with essentially the technology from Genetron and samples and data from AZ, plus the investment from both sides.

因此，安排的另一層是，我們可能會建立商業合作夥伴關係，以在臨床環境中推廣這種檢測方法。我的意思是——當我說臨床環境時，我的意思是為患者服務。所以這個商業廣告——合作細節實際上是要首先討論並最終確定的。但雙方都感到很興奮，因為我們將能夠利用 Genetron 的技術、AZ 的樣本和數據以及雙方的投資來共同開發這種檢測方法。

And we see quite a bright future to incorporate this -- essentially incorporate or commercialize this assay in both the clinical trials as well as to serve the patients in the clinical setting. And it's likely we'll be expanding this potential collaboration to a more broader market as well in the future.

我們看到了將這一技術納入其中的光明前景——本質上是將這種檢測方法納入臨床試驗或將其商業化，並在臨床環境中為患者提供服務。未來我們很可能會將這種潛在的合作擴展到更廣闊的市場。

Got it, thanks.

知道了謝謝。

Thank you. (Operator Instructions). Please stand by while we compile the Q&A roster.

謝謝。 （操作員說明）。我們正在整理問答名單，請稍候。

And I'm showing no other questions in the queue. I would like to turn the call back to management for any closing remarks.

我在隊列中沒有顯示其他問題。我想將電話轉回給管理層，讓他們發表結束語。

Okay. Thank you, operator and thank you, everyone. Thank you again for joining us for the First Quarter Earnings and Business Update Call. We appreciate your ongoing support. If you have any questions, please do not hesitate to reach out to us. Thank you.

好的。謝謝運營商，謝謝大家。再次感謝您參加我們的第一季度收益和業務更新電話會議。我們感謝您持續的支持。如果您有任何疑問，請隨時與我們聯繫。謝謝。

Operator?

操作員？

This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。大家，祝你有美好的一天。

Thanks.

謝謝。