Market review: this week, the pharmaceutical and biological index fell 6.83%, 2.32 percentage points lower than the Shanghai and Shenzhen 300 index, and the rise and fall of the industry ranked 32nd. Since the beginning of 2022, the pharmaceutical industry has fallen by 14.94%, underperforming the CSI 300 index by 7.32 percentage points, ranking 29th in terms of rise and fall. This week, the valuation level of the pharmaceutical industry (pe-ttm) was 28.53 times, with a premium rate of 87% (- 4.6pp) relative to all a shares, 41% (- 3PP) relative to all A-Shares excluding banks, and 129% (- 6.1pp) relative to CSI 300. The pharmaceutical sub industry generally fell this week. The sub industry with the smallest decline was vaccine, with a decline of about – 5.1%. Since the beginning of the year, the sub industry with the smallest decline is blood products, with a decline of about – 7.5%.
The performance of the pharmaceutical sector remained strong in 2021, and the pharmaceutical sector ushered in a good opportunity for layout. In January 2022, the adjustment of the pharmaceutical sector was relatively strong, and SW pharmaceutical fell 14.94%. We think there are two main factors: 1 The documents of Guangdong Provincial Union on the centralized purchase of growth hormone were implemented, and the related white horse led the market to decline; 2. Recently, covid-19 detection and covid-19 oral drug related thematic investments have been significantly callback. At the current time point, we are more and more optimistic about the pharmaceutical sector: 1 From the perspective of valuation, the current PE (TTM) of the pharmaceutical sector is 28 times, which is below the center of valuation in recent 10 years and is currently in the undervalued area; 2. From the perspective of fundamentals, according to the performance forecast of more than 50 key coverage companies, the performance of the pharmaceutical sector is still very strong. It is expected that in 2021q4, 10 companies have a performance growth rate of more than 50%, 10 companies have a net profit growth rate of 30% ~ 50%, 9 companies have a 15% ~ 30% growth rate, and 5 companies have a 0% ~ 15% growth rate. Combined with the two main lines of the annual strategy in 2022: “through medical insurance” and “epidemic desensitization”, we believe that the pharmaceutical sector has ushered in the best layout time point in the near future. It is suggested that investors focus on several sector layout opportunities: Traditional Chinese medicine consumer goods, undervalued varieties with upward business trend.
Elastic combination this week: Shanghai Runda Medical Technology Co.Ltd(603108) (603108), Chongqing Taiji Industry (Group) Co.Ltd(600129) (600129), Tianjin Zhongxin Pharmaceutical Group Corporation Limited(600329) (600329), Zhejiang Shouxiangu Pharmaceutical Co.Ltd(603896) (603896), Haisco Pharmaceutical Group Co.Ltd(002653) (002653).
This week’s scientific innovation board combination: Baiji Shenzhou (688235), Cansino Biologics Inc(688185) (688185), Suzhou Zelgen Biopharmaceuticals Co.Ltd(688266) (688266), Chengdu Olymvax Biopharmaceuticals Inc(688319) (688319), Aohua endoscopy (688212).
{43763} (6006000), {43763} (300763} (6006000), Merit Interactive Co.Ltd(300766) (300763}).
This week’s Hong Kong stock portfolio: Yaoming Biology (2269), Shanghai Junshi Biosciences Co.Ltd(688180) (1877), haijiya (6078), minimally invasive Siasun Robot&Automation Co.Ltd(300024) (2252), Jinxin reproduction (1951).
Risk warning: drug price reduction risk; The implementation progress of medical reform policy is lower than the expected risk; Risk of R & D failure.
