Investment logic
Continue to be optimistic about the investment opportunities under the wave of localization of pharmaceutical equipment / scientific instruments. For the first time, the “XIV” guiding ideology of “accelerating the comprehensive development of the pharmaceutical industry chain and improving the level of” controllable supply chain “points out that the” fifth “guiding ideology of” accelerating the comprehensive development of the pharmaceutical industry chain and improving the supply chain “. The pharmaceutical supply chain represented by pharmaceutical equipment / scientific instruments is expected to usher in a critical period of development during the 14th Five Year Plan period.
China’s pharmaceutical equipment industry is starting from a cyclical industry under the renewal of the “GMP” standard in the past to a growth industry driven by “demand + supply”. On the demand side, China’s biopharmaceutical industry is booming; On the supply side, the enterprise’s ability is continuously accumulated in market opportunities, and the ability circle of head pharmaceutical equipment company continues to expand.
Policy: on November 9, 2021, the national development and Reform Commission and the Ministry of industry and information technology jointly issued the notice on the implementation plan for promoting the high-quality development of API industry, which proposed to support the improvement of domestic capacity of synthetic processes, high-end equipment, high-energy consumption materials, digitization and other technologies involved in API production. Local governments have also issued a number of policies. In August 2021, the general office of Hebei Provincial People’s government issued the notice on several measures to support the development of pharmaceutical industry; In September 2021, Shijiazhuang issued the action plan for fully expanding and strengthening the pharmaceutical industry (2021-2023); On December 20, 2021, Shanghai Municipal Commission of economy and information technology issued the notice on printing and distributing the 14th five year plan for the development of Shanghai’s high-end equipment industry.
Scientific instruments: scientific instruments have large market space and low localization rate in high-end market. On the supply side, with the precipitation of technology research and development of Chinese enterprises in the past ten years, it has gradually realized from scratch; On the demand side, the downstream demand is booming, and the national policy continues to guide and support. We believe that the current rise of China’s domestic high-end scientific instruments represented by mass spectrometry is at the right time.
Policies: policies related to scientific instruments in the fields of environmental protection, cultural relics protection, medical and health have been issued one after another; For the first time in the 14th five year plan, “strengthening the R & D and manufacturing of high-end scientific research instruments and equipment” was included in the national development plan; At the meeting of the Political Bureau of the CPC Central Committee held on July 30, it was proposed to speed up the solution of the “neck sticking” problem, develop “specialized and special new” small and medium-sized enterprises, and many scientific instrument enterprises were included in the “small giants” of specialized and special new; Xi Jinping after the 75th UN General Assembly first proposed the “double carbon goal”, relevant policies have been implemented successively. Among them, chromatography, mass spectrometry and spectrum are important tools for pollution sources and environmental monitoring.
Investment advice
Under the background of the vigorous development of China’s biopharmaceutical industry, the pharmaceutical equipment industry has ushered in structural opportunities. The localization rate of high-end pharmaceutical equipment has increased significantly, the cash flow of head pharmaceutical equipment company has continued to improve, and the capability circle has been continuously expanded. Based on the current transformation of China’s economy to higher quality, the gradual opening of market applications and the continuous support of national policies, the scientific instrument industry has good development prospects, and the total demand of the high-end scientific instrument market has gradually increased; In terms of structure, policy support and innovation of instrument enterprises have accelerated, and we are optimistic about the growth elasticity of domestic mass spectrometry enterprises under domestic substitution.
Suggestions: Sensong international, Tofflon Science And Technology Group Co.Ltd(300171) , Truking Technology Limited(300358) , Zhejiangtailin Bioengineering Co.Ltd(300813) , Focused Photonics (Hangzhou) Inc(300203) , etc.
Risk tips
Risk of orders falling short of expectations; R & D is less than expected risk; Risk of increased competition; Policy supervision risk, etc.
