Thinking this week: the 14th five year plan is released, innovative manufacturing and upgrading
On January 30, 2022, the Ministry of industry and information technology, the development and Reform Commission, the Ministry of science and technology, the Ministry of Commerce, the health and Health Commission, the Ministry of emergency management, the state medical insurance administration, the State Food and drug administration, the State Administration of traditional Chinese Medicine and other nine departments jointly issued the "14th five year plan" for the development of the pharmaceutical industry, putting forward the development goals of the industry in the next five years and the long-term goals of 15 years.
We believe that the 14th five year plan for the pharmaceutical industry is a major positive document for the pharmaceutical industry. On the basis of the 13th five year plan, it further emphasizes that the pharmaceutical industry is far higher than the development goal of GDP (8%), and puts forward comprehensive planning and guidance for the pharmaceutical industry from the aspects of innovation, manufacturing, informatization and internationalization. Innovation puts more emphasis on internationalization and is the mainstream market. Manufacturing puts more emphasis on global supply chain and common technology support. At the same time, it also puts forward specific development directions for the innovation and key technologies of four fine molecule industries (chemical medicine, traditional Chinese medicine, biological medicine and medical devices). We once again emphasize the main line of "grasping manufacturing and welcoming innovation" proposed in the annual strategy of 2022.
Performance this week: the correction is obvious and the rise is imminent
This week (January 24-28, 2022), the pharmaceutical sector fell 6.91%, underperforming the CSI 300 index by 2.40 percentage points, ranking fourth from bottom among all industries. In terms of trading volume, the turnover of the pharmaceutical industry this week was 425.01 billion yuan, accounting for 10.1% of the total turnover of all a shares, down 3.4pct month on month, 2.0pct higher than the central level since 2018. As of January 28, 2022, the overall valuation of the pharmaceutical sector (historical TTM, overall method, excluding negative values) was 29 times, down 3.0pct month on month, which was significantly lower than the central level since 2011 (pe38 times). The valuation premium rate of the pharmaceutical industry relative to the CSI 300 was 135.6%, down 11.4pct from the previous week, significantly lower than the central level in the past four years (182.3%).
According to the classification of wind CITIC medicine, all fine molecular sectors of biomedicine fell this week except traditional Chinese medicine (up 6.9%), including chemical agents (down 9.4%) and Chinese patent medicines (down 8.1%), and the medical service sector (down 5.4%). Considering that the classification of CITIC pharmaceutical involves cross businesses of some companies, according to the classification of key companies of Zheshang pharmaceutical, R & D innovative pharmaceutical enterprises, medical devices and medical services were the sectors with the largest decline this week (down 12.1%, 8.2% and 8.1% respectively), and the characteristic raw material pharmaceutical enterprises with the smallest decline (down 4.4%). Among them, the innovative drug sector was mainly driven by the decline of Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) (down 17.3%), Chengdu Kanghong Pharmaceutical Group Co.Ltd(002773) (down 11.6%) and Betta Pharmaceuticals Co.Ltd(300558) (down 10.7%); Medical devices were mainly driven by Lepu Medical Technology (Beijing) Co.Ltd(300003) (down 14.3%), Tellgen Corporation(300642) (down 14.1%) and Berry Genomics Co.Ltd(000710) (down 12.9%); In the medical service block, Autek China Inc(300595) (down 12.0%) and Guangzhou Kingmed Diagnostics Group Co.Ltd(603882) (down 11.9%) had large declines.
Pharmaceutical investment strategy in 2022: grasp manufacturing and welcome innovation
We suggest that investors should break the "core assets" and "sector concept" so that they can look at the investment opportunities in the upstream and manufacturing links with the industrial chain thinking, and the innovative pharmaceutical machinery will continue to survive the fittest during the transition period. We believe that in 2022, medicine should adhere to the investment strategy of "grasping manufacturing and welcoming innovation".
Specifically, it is recommended to focus on:
1) manufacturing sector: API, cdmo and other subdivided fields, and Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) , Apeloa Pharmaceutical Co.Ltd(000739) , Wuxi Apptec Co.Ltd(603259) , Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) , Porton Pharma Solutions Ltd(300363) , Hainan Poly Pharm.Co.Ltd(300630) are recommended.
2) upstream: pharmaceutical equipment, reagents, consumables and other fields, recommend Sensong international, Tofflon Science And Technology Group Co.Ltd(300171) , Shanghai Titan Scientific Co.Ltd(688133) , Shanghai Aladdin Biochemical Technology Co.Ltd(688179) , Jenkem Technology Co.Ltd(688356) and pay attention to Qingdao Haier Biomedical Co.Ltd(688139) , Zhejiangtailin Bioengineering Co.Ltd(300813) , Truking Technology Limited(300358) , Iray Technology Company Limited(688301) , Qingdao Novelbeam Technology Co.Ltd(688677) .
3) innovation: for international equipment and pharmaceutical companies, it is recommended to pay attention to Micro-Tech (Nanjing) Co.Ltd(688029) , minimally invasive medical treatment, Beijing Balance Medical Technology Co.Ltd(688198) , Baiji Shenzhou, Xinda biology, Shanghai Junshi Biosciences Co.Ltd(688180) , kangfang biology, etc.
4) others: consumer attributes, medical services, innovative supporting industry companies, recommend Hangzhou Tigermed Consulting Co.Ltd(300347) , Joinn Laboratories (China) Co.Ltd(603127) , pay attention to Chongqing Zhifei Biological Products Co.Ltd(300122) , Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) , Shenzhen Kangtai Biological Products Co.Ltd(300601) , Aier Eye Hospital Group Co.Ltd(300015) , Topchoice Medical Co.Inc(600763) , Hubei Jumpcan Pharmaceutical Co.Ltd(600566) , Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) , etc
Risk tips
Changes in industrial policies; The price reduction of core products exceeded expectations; R & D progress is less than expected.
