Industry Review
During the reporting period, the pharmaceutical and biological industry index fell by 13.54%, with poor performance. It ranked 31st among Shenwan’s 31 primary industries, outperforming the CSI 300 index (- 3.45%). From the perspective of sub industries, the tertiary industry of medicine and biology fell across the board, with other biological products, in vitro diagnosis and medical consumables leading the decline, with a decline of 22.05%, 19.99% and 18.05% respectively. In terms of valuation, as of January 28, 2022, the PE (TTM overall method, excluding negative values) of the pharmaceutical and biological industry was 28.91x (33.48x in the previous period), which was lower than the average minus double the standard deviation. The PE (TTM overall method, excluding negative values) of API, chemical agents, traditional Chinese medicine, blood products, vaccines, other biological products, pharmaceutical circulation, offline pharmacies, medical equipment, medical consumables, in vitro diagnosis, diagnostic services, medical R & D outsourcing, hospitals and other medical services in Shenwan tertiary industry are 34.20x, 29.14x, 29.01x, 34.09x, 28.41x, 25.79x respectively 11.68x、28.61x、42.33x、16.64x、18.93x、18.61x、64.40x、65.24x、87.10x。
During the reporting period, the shareholders of 40 listed companies in the pharmaceutical and biological industries in the two cities reduced their net holdings by 3.275 billion yuan. Among them, 10 increased their holdings by 231 million yuan and 30 reduced their holdings by 3.506 billion yuan.
As of February 6, 2022, 212 of the 387 listed companies in the pharmaceutical and biological industry we tracked have disclosed the performance forecast of 2021. Among them, the number of companies whose performance forecast types are pre increase, slight increase and turnaround is 84 / 20 / 26 respectively; There are 89 companies with the lower limit of forecast net profit growth equal to or exceeding 30% and positive net profit attributable to the parent company in 2020.
Important industry information
The 14th five year plan for the development of pharmaceutical industry was released
The centralized purchase of Guangdong proprietary Chinese medicine alliance was launched
Another pound of biological medicine began to be collected
Official volume report of the seventh batch of centralized purchase
47 large varieties, the Yangtze River Delta belt volume procurement began
Investment suggestions:
The 14th five year plan for the development of pharmaceutical industry was officially released, which made specific requirements for the development objectives during the 14th Five Year Plan period from six aspects: scale efficiency, innovation drive, industrial chain, supply chain, supply guarantee ability, manufacturing level and internationalization, and gave guidelines for the industry to maintain a growth rate of more than 8%. In recent years, the centralized purchase of national drugs and high-value consumables has been continuously promoted, showing normalization and institutionalization, health insurance negotiations have been normalized, medical related policies have been intensively released, chemical drugs, biological drugs and traditional Chinese medicine have been affected to varying degrees, and quality and cost control will still be the main law of pharmaceutical policies in the future.
During the reporting period, the valuation level of the pharmaceutical industry sector is significantly lower than the industry average and slightly lower than the negative standard deviation level of the industry. The current valuation has significant allocation advantages. We suggest increasing the allocation proportion of the industry and paying attention to investment opportunities in six aspects: first, pay attention to innovation driven companies and pharmaceutical enterprises with international ability; Second, pay attention to the subject matter of high-quality white horse stocks whose annual report and quarterly report performance exceed expectations; Third, drugstore chain companies with reasonable valuation and stable recovery; Fourth, the CXO industry, which has undergone in-depth adjustment recently, bucked the trend and focused on companies with sufficient orders and reasonable current valuation; Fifth, pay attention to the consumer medical section. Under the background of medical insurance fee control, the ophthalmology, medical beauty and other medical sub industries with consumption attribute have policy immunity, and the consumption upgrading will drive their development; Sixth, pay attention to the traditional Chinese medicine sector. The release of the guiding opinions on medical insurance supporting the inheritance, innovation and development of traditional Chinese medicine shows the state’s determination to the inheritance, innovation and development of traditional Chinese medicine, which will play a positive role in the traditional Chinese medicine industry.
Risk tips:
The performance release of medical insurance negotiation varieties is less than expected; Covid-19 epidemic situation is repeated; Policy uncertainty.
