Aggressive expansion faces performance setbacks; "The first stock in scientific services," Titan Technology, awaits a breakthrough | Xiao K on the company

Does AI · Aggressive Expansion Plan Worsen the Company’s Financial Risks?

“Science and Technology Innovation Board Daily” April 1st News (Reporter Shi Shiyun)
By the end of March, Shanghai was already full of new growth and signs of recovery everywhere, but for Titan Technology (688133.SH), which has been listed on the Sci-Tech Innovation Board for over five years, the past 2025 was a critical year for the company’s strategic adjustments, and also the year with the most pressure and challenges.

The company’s net profit had been declining for three consecutive years prior, never hitting an inflection point, and in 2025, it even posted a pre-loss. Amidst the spring scenery, Titan Technology has yet to see its own “spring” for now.

On March 30th, Titan Technology held its first extraordinary general meeting of shareholders in 2026, electing a new board of directors. The company hopes that the fifth board will fulfill its duties responsibly, continue to push for scientific research innovation, support emerging industries, and further enhance the company’s core competitiveness and operational quality.

Before the new board was formed, Titan Technology moved into a new office area. It relocated from downtown Shanghai at the end of 2025 to Fengxian Bonded Zone, where the company now enjoys taller, wider office spaces and more advanced, brand-new laboratories. Titan Technology views this as a new development milestone.

Against the backdrop of increasingly fierce competition in the life sciences service industry, whether Titan Technology, mired in performance difficulties, can break through remains to be validated by future market development.

▌First Loss in Five Years Since Listing
In 2025, Titan Technology delivered its most disappointing financial report since going public. The company shifted from profit to loss, marking its first annual loss since listing on the Sci-Tech Innovation Board in 2020.

According to the performance quick report, in 2025, Titan Technology achieved revenue of 2.52B yuan, down 12.79% year-on-year. Net profit attributable to the parent was a loss of 13.0443 million yuan, a decline of 201.17% from the net profit of 12.8929 million yuan in the same period last year. The net profit after deducting non-recurring gains and losses was a loss of 72.2797 million yuan, a sharp decrease of 1,363.43% compared to the previous year. Meanwhile, Titan Technology’s operating profit in 2025 fell 486.87% from the previous year, and total profit also decreased by 458.11%.

In stark contrast, another leading domestic scientific service company, Aladdin (688179.SH), achieved both revenue and net profit attributable to the parent in 2025, with year-on-year increases of 28.66% and 4.75%, respectively, reaching revenue of 686 million yuan and net profit of 103 million yuan.

Founded in 2007, Titan Technology focuses on providing one-stop laboratory products and supporting services for researchers and quality control personnel. It has formed eight major product lines, including high-end reagents, general reagents, analytical reagents, special chemicals, security consumables, instruments and meters, laboratory construction, and scientific research software. Its products are mainly used in biomedicine, new materials, food and daily chemicals, intelligent manufacturing, and chemical industries. In October 2020, Titan Technology was listed on the Sci-Tech Innovation Board, branded as the “First Stock of Scientific Services.”

The spotlight effect brought by the capital market once helped Titan Technology achieve a performance high point after listing. In the year following its listing, the company’s revenue and net profit grew by approximately 56.36% and 39.81%, respectively. However, since 2021, despite continued revenue growth, net profit has steadily declined, ultimately turning into a loss in 2025.

Regarding the 2025 loss, Titan Technology stated that the company had carried out business restructuring, strengthening the match between customer needs and the company’s capabilities. It actively abandoned some unprofitable or capital-consuming businesses, leading to a decline in operating income. Additionally, the new fixed assets put into use increased depreciation and amortization, and factors such as goodwill impairment and inventory write-downs contributed to the significant drop in performance.

When asked which businesses were specifically abandoned in 2025, Titan Technology told “Science and Technology Innovation Board Daily” that: “The company did not make large-scale adjustments to the overall business segments but optimized certain low-margin products and low-margin brands. For example, some proprietary brands and third-party brands, if after comprehensive cost accounting they are in a loss position, the company will selectively phase out such businesses.”

According to “Science and Technology Innovation Board Daily” reporter, Titan Technology adopts a direct sales model, selling both its own brands and third-party brands (such as Thermo Fisher, Dow Chemical, 3M, and other foreign brands). It combines procurement of third-party products with its own brands to sell to downstream customers.

The scientific services industry, where Titan Technology operates, features a wide product range, many categories, complex production technologies, and diverse customer needs. Products and services must be highly aligned with downstream research and industrial demands.

Currently, the scientific service industries in developed countries like the US and Europe have entered a mature stage, with relatively stable market structures. Many industry players achieve resource integration and business expansion through mergers and acquisitions, leading to increased industry concentration. Some globally influential companies have emerged, such as Thermo Fisher and Danaher.

Among them, Thermo Fisher has built a core competitive barrier through an integrated full-industry chain ecosystem and global layout. After merging with Applied Biosystems in 2006, it has continued to expand via acquisitions and in-house R&D, creating a comprehensive scientific service system covering instruments, reagents, consumables, and technical services, earning the reputation as the “Air Carrier of Scientific Services.”

Danaher, with over 600 acquisitions, is recognized as the “King of Industry Integration” globally. It specializes in rapid entry into high-barrier niche fields through frequent transactions, often acquiring hidden champions in specific segments. By leveraging technological synergy, it has established significant advantages in areas like mass spectrometry and molecular diagnostics.

Looking domestically, China’s scientific research sector started relatively late, with technological and industrial bases still lagging behind developed countries. However, under continuous national policy support for technological innovation, domestic R&D investment has maintained rapid growth, driving the fast development of China’s scientific service industry in recent years. This has fostered leading enterprises such as Titan Technology, Aladdin, and Sinopharm Reagents.

▌Debate on Expansion: Heavy Asset Investment and M&A Integration Under Dual Tests
Given the complex product categories, high technological barriers, and diverse customer demands in the scientific service industry, and considering the development paths of international giants, it is not easy for domestic scientific service companies to break through the late-starting bottleneck and grow big and strong.

Under performance pressure, Titan Technology has chosen a more aggressive path—large-scale expansion.

According to on-the-ground research by “Science and Technology Innovation Board Daily,” Titan Technology has now established four major industrial bases nationwide:

• Yichang, Hubei: mainly producing general reagents and special functional chemicals;
• Anqing, Anhui: focusing on high-purity solvents and electronic chemicals;
• Songjiang, Shanghai: dedicated to high-end chemicals and biological reagents R&D, production, and operation;
• Fengxian Life Sciences Headquarters Park: mainly responsible for high-end scientific instruments and supporting reagents and consumables R&D and manufacturing. The total investment in these four bases is around 3 billion yuan.

It is also worth noting that in March this year, Titan Technology disclosed that the completion and operational readiness of its Life Sciences Headquarters Park project would be delayed to March 2027, due to construction delays and slower equipment procurement.

Even at its peak, Titan Technology’s net profit did not exceed 150 million yuan. In this context, is such large-scale expansion rational planning or high-risk investment? This has raised concerns about resource efficiency and market doubts: if future revenue and profits do not meet expectations, will aggressive expansion further drag down the company’s performance?

In response, Titan Technology told “Science and Technology Innovation Board Daily” that: “In the past, the industry competed mainly on price, efficiency, and quality. The core of future competition will be the enhancement of industry level.” The company previously focused more on front-end scientific research services and laboratory applications. Its industrial layout and capabilities are relatively weak. The current four bases are meant to fill this gap and strengthen overall industrial competitiveness.

Titan Technology also revealed that its Anqing and Songjiang bases have already achieved breakeven.

Currently, hundreds of laboratories are still in debugging. The company’s plan is for these labs to serve four functions:

• Support independent R&D, starting from verification stages, and collaborate with downstream clients on new products and applications;
• Build a professional service system with CS certification that can operate independently;
• Participate in industry standard-setting through verification platforms;
• Open to universities, research institutes, students, and middle schoolers for science popularization and outreach, further amplifying social value.

While vigorously expanding internal capacity and business, Titan Technology is also pursuing continuous external M&A. It now owns 14 proprietary brands, half of which were acquired through mergers. It has acquired targets such as Anhui Tiandi, Rundu Biotech, Maigao Instruments, and Qinxiang Instruments. The latest acquisition was in March 2025, when the company bought UK chemical manufacturer Apollo Scientific Ltd for about 5.7564 million pounds.

Questions also arise: continuous M&A could inflate goodwill, and if the acquired companies’ performance does not meet expectations, it could trigger goodwill impairment risks, adversely affecting net profit and overall operations.

Titan Technology’s 2025 goodwill impairment risk mainly stemmed from the impairment of Rundu Biotech and Maigao Instruments, which were acquired in 2024. Due to intensified market competition, their performance failed to meet the flexible commitments, leading Titan to recognize about 28 million yuan in goodwill impairment in 2025, one of the reasons for the shift from profit to loss.

Titan Technology told “Science and Technology Innovation Board Daily” that: “Currently, the company’s goodwill is around 200 million yuan.” They added that: “The company’s recent M&A activity has been reasonable and cautious, not reckless expansion. The pace of industry integration is generally consistent with domestic peers. Compared to international giants with hundreds of acquisitions, our pace is restrained, and post-merger integration benefits are beginning to show. The acquired companies are also expected to achieve greater breakthroughs.”

However, on the other hand, Titan Technology also faces high levels of accounts receivable and inventory.
The third-quarter 2025 report shows accounts receivable of 729 million yuan and inventory of 3M yuan, with accounts receivable accounting for nearly 30% of revenue and inventory over 20% of total assets.

Titan Technology admitted that most of its clients are universities, research institutes, government agencies, and corporate R&D departments, with generally good credit. The company has also made provisions for bad debts prudently. But if a large portion of accounts receivable cannot be collected in time, it could lead to bad debt losses, impacting operations and cash flow.

In the secondary market, Titan Technology’s stock price increased by over 23% in the past year. As of April 1st, the closing price was 20.78 yuan per share, with a market capitalization of 1.01B yuan, compared to Aladdin’s 3.42B yuan.

From the “First Stock of Scientific Services” capital halo to its first loss in five years, whether Titan Technology can truly emerge from the performance trough and realize its “spring” depends not only on controlling expansion pace and improving asset efficiency but also on establishing a long-term balance among business structure, cost control, and cash flow security.

(Science and Technology Innovation Board Daily Reporter Shi Shiyun)