Report guide
Since 2021, the pharmaceutical sector has significantly adjusted, but the pharmaceutical industry is still changing in the direction of more and more international and market-oriented competition; CXO logic is not broken, and the independent and controllable marginal changes in the pharmaceutical industry chain deserve attention.
Key investment points
Thinking this week: valuation adjustment and innovation
Since 2021, the pharmaceutical sector has significantly adjusted, but the pharmaceutical industry is still changing in the direction of more and more international and market-oriented competition. From the perspective of PE (TTM), except for traditional Chinese medicine decoction pieces, the PE valuation of other sectors is significantly lower than the historical average; From the perspective of PEG (predicted value), on February 11, 2021, the overall peg of the pharmaceutical sector was slightly higher than the historical median, the latest data of medical services, traditional Chinese medicine, pharmaceutical commerce and other sectors were slightly lower than the historical median, and the latest valuation of the biological products sector reached the lowest level in history. With the expansion of centralized mining, the normalization of anti epidemic and the internationalization of competition, the competitive environment and profit model of drug, equipment and service companies have changed greatly, but the main line of market-oriented and international competition has not changed.
Is CXO logic broken? We don't think so. At the same time, the independent and controllable marginal changes of the pharmaceutical industry chain deserve attention: ① CXO: the upgrading of supply capacity has the comparative advantage of global division of labor. ② Pharmaceutical supply chain:
It is imperative to strengthen the independent control of local equipment / consumables.
Performance this week: the sector fell and CXO adjusted
The pharmaceutical sector fell 3.1% this week, underperforming the CSI 300 index by 3.9 percentage points and ranking third from bottom in all industries. In terms of trading volume, the turnover of the pharmaceutical industry this week was 403.7 billion yuan, accounting for 8.8% of the total turnover of all a shares, down 1.3pct month on month, 0.7pct higher than the central level since 2018. As of February 11, 2022, the overall valuation of the pharmaceutical sector (historical TTM, overall method, excluding negative values) was 28.3 times, down 1PCT month on month, which has been significantly lower than the central level since 2011 (PE 38 times). The valuation premium rate of the pharmaceutical industry relative to the CSI 300 was 122.8%, down 12.7 PCT from the previous week, significantly lower than the central level in the past four years (182.3%).
According to the classification of wind CITIC medicine, except for the obvious adjustment of medical services (down 10.7%), chemical APIs (4.9%) and medical devices (3.7%), other sectors fluctuated slightly this week. Considering that the classification of CITIC pharmaceutical involves cross businesses of some companies, according to the classification of key companies of Zheshang pharmaceutical, the adjustment of pharmaceutical services (down 11.2%) and characteristic API enterprises (down 8.7%) is obvious this week, and the adjustment of cdmo transformed companies among characteristic API enterprises (such as Zhejiang Ausun Pharmaceutical Co.Ltd(603229) , Zhejiang Tianyu Pharmaceutical Co.Ltd(300702) , Apeloa Pharmaceutical Co.Ltd(000739) is more obvious.
Pharmaceutical investment strategy in 2022: grasp manufacturing and welcome innovation
We suggest that investors should break the "core assets" and "sector concept" so that they can look at the investment opportunities in the upstream and manufacturing links with the industrial chain thinking, and the innovative pharmaceutical machinery will continue to survive the fittest during the transition period. We believe that in 2022, medicine should adhere to the investment strategy of "grasping manufacturing and welcoming innovation".
Specifically, it is recommended to focus on:
1) manufacturing sector: API, cdmo and other subdivided fields, and Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) , Apeloa Pharmaceutical Co.Ltd(000739) , Wuxi Apptec Co.Ltd(603259) , Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) , Porton Pharma Solutions Ltd(300363) , Hainan Poly Pharm.Co.Ltd(300630) are recommended.
