Weekly market review (2022.01.24-2022.01.28): this week, the pharmaceutical sector fell 7.42%, 2.51 percentage points lower than the CSI 300 index, and the PE (TTM) of the pharmaceutical sector was about 28.53 times, with a premium rate of 129% relative to the CSI 300, which was at a historical low in recent ten years. Looking forward to 2022, we believe that traditional Chinese medicine is expected to have investment opportunities throughout the year. In previous sessions, we discussed the reconstruction of OTC valuation of traditional Chinese medicine and how medical insurance supports the development of traditional Chinese medicine. This week, we continue to dig into the track of traditional Chinese medicine chain medical services, based on the huge demand for favorable policies and health management, We believe that traditional Chinese medicine chain medical services in the form of medical consortium may rise suddenly, so as to drive the demand linkage of the whole traditional Chinese medicine industry chain.
Traditional Chinese medicine services meet the needs of health management, and policies encourage the birth of a new trillion market. Traditional Chinese medicine has unique advantages in health management, which can meet the urgent needs of chronic disease management in China. Policies have been issued frequently to accelerate the development of traditional Chinese medicine, and the clinic filing system has accelerated the extension of traditional Chinese medicine services. We believe that TCM services are in a period of rapid development. Frost Sullivan predicts that the compound growth rate from 2019 to 2030 is expected to reach 18.2%, and the TCM diagnosis and treatment service market will have 3 ~ 4 times the expansion space in the future. The first mock exam is more effective than traditional Chinese medicine. The new Chinese version of the doctor’s law makes it possible for doctors in the Medical Association to practice more. Chinese medicine is more suitable for the “medical conjoined body plus multi point practice” mode. Private Chinese medicine service is expected to help to sink the high-quality medical resources with this model, effectively alleviate the mismatch of supply and demand of medical resources, and get patients to see the “last mile”.
Focus on the standardized TCM chain service in the form of medical consortium and its demand driving and important channel value for traditional Chinese medicine decoction pieces. We are optimistic about the traditional Chinese medicine chain medical service in the form of combination of traditional Chinese medicine and traditional Chinese medicine. The management and operation efficiency is high, the cost of obtaining customers is low, and the standardized operation is easier to attract doctors to practice more. Considering that the clinic filing system provides sufficient cooperation targets for private chains, it is the general trend for mergers and acquisitions to accelerate the chain. In addition, traditional Chinese medicine chain medical services will also drive the high-quality development of upstream traditional Chinese medicine. At the same time, the channel value of traditional Chinese medicine decoction pieces (including formula particles) is expected to continue to highlight.
Investment suggestion: the general trend of the chain of private traditional Chinese medicine and drive the high-quality development of the upstream. It is suggested to pay attention to the chain of traditional Chinese medicine chain service gushengtang, the planting of traditional Chinese medicine Shanxi Zhendong Pharmaceutical Co.Ltd(300158) , formula particles China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) , Tianjin Chase Sun Pharmaceutical Co.Ltd(300026) , etc.
This week’s stock recommendations focus on Portfolio:
Growth Portfolio: Pharmablock Sciences (Nanjing) Inc(300725) , Beijing Balance Medical Technology Co.Ltd(688198) , Eyebright Medical Technology(Beijing) Co.Ltd(688050)
Robust portfolio: China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) , Baicheng pharmaceutical, Chongqing Taiji Industry (Group) Co.Ltd(600129)
Flexible combination: GUSHENG hall, Tianjin Chase Sun Pharmaceutical Co.Ltd(300026) , Shanxi Zhendong Pharmaceutical Co.Ltd(300158)
Risk tips: changes in medical policies; The demand for medical consumption decreased; Concern that the company’s performance does not meet expectations.
