Market review: in January 2022, Shenwan pharmaceutical index fell 14.94%, underperforming the CSI 300 index by 7.32%, ranking 30 in the whole industry market this month. The valuation premium rate of the pharmaceutical industry relative to all A-Shares is 87%, the premium rate relative to all A-Shares excluding banks is 41%, and the premium rate relative to the CSI 300 index is 129%. In January, blood products (- 7.5%) fell the least and other biological products (- 23.8%) fell the most.
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, which is a very important signal of undervaluation; 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. The valuation of the pharmaceutical sector is undervalued + the performance in 2021 is still strong. We believe that the pharmaceutical sector has ushered in the best layout time point recently. Combined with the two main lines of the annual strategy in 2022: “through medical insurance” and “epidemic desensitization”, it is suggested that investors focus on several sector layout opportunities: Traditional Chinese medicine consumer goods / innovative drugs / undervalued, low expectation and varieties with upward business trend.
Elastic combination: 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).
Combination of scientific innovation board: Baiji Shenzhou (688235), Cansino Biologics Inc(688185) (688185), Suzhou Zelgen Biopharmaceuticals Co.Ltd(688266) (688266), Chengdu Olymvax Biopharmaceuticals Inc(688319) (688319), Aohua endoscope (688212).
Robust combination: Wuxi Apptec Co.Ltd(603259) (603259), Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) (300760), Jiangsu Hengrui Medicine Co.Ltd(600276) (600276), Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) (600436), Topchoice Medical Co.Inc(600763) (600763).
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: expected risk of drug price reduction; The implementation progress of medical reform policy is lower than the expected risk; Risk of R & D failure.
