After decades' development, the number of enterprises in China diagnostic reagents industry decreased from more than 300 to 80 or so at present. Several large-size enterprises take the majority of market shares. The targeted markets are mainly focused on major diseases such as hepatitis B, hepatitis C, AIDS and syphilitic disease, etc.

Shanghai Kehua Bio-engineering Co., Ltd. started to enter the field of nucleic acid diagnostic reagents in 2003. With the completion of nucleic acid PCR R&D and Production Platform, the Company now has three product categories for hepatitis B, hepatitis C and HIV/AIDS nucleic diagnosis.

The sales revenue of nucleic acid diagnostic reagents only reached RMB 3 million in 2005, while the figure in 2006 rocketed to more than RMB 8 million with a year-on-year growth of 148%.

In 2006, the sales revenue of medical instruments developed by the Company amounted to RMB 17.21 million, up 46.89% from a year earlier. The average growth in recent three years reached as high as about 55%.

Composition of China Diagnostic Reagents Industry

Main Business Revenue Composition of Kehua Bio-Engineering, 2006

2 Extension of Production Lines
2.1 R&D Investment
2.2 Development of Nucleic Acid Diagnosis
2.3 Business of Medical Instruments

3 Analysis of Corporate Marketing Strategy
3.1 Domestic Market
3.2 Overseas Market