Peace view
Industry view: the state will normalize and institutionalize the procurement with volume, and the market has fully expected its impact. The State Information Office held a regular policy briefing on February 11. Chen Jinfu, deputy director of the National Medical Insurance Bureau, introduced that in the next step, the National Medical Insurance Bureau will carry out the centralized procurement of drugs and high-value medical consumables in a normalized and institutionalized manner. Centralized drug purchase is carried out in three sectors: chemical medicine, Chinese patent medicine and biological medicine; High value medical consumables focus on orthopedic consumables, drug balloons, dental implants and other varieties. By the end of 2022, the total number of national and provincial centralized procurement drugs will reach more than 350 in each province, and the number of high-value medical consumables will reach more than 5.
We believe that centralized purchase has become the norm, so the market has fully expected its impact. The normalization of national procurement and local centralized procurement will lead to the reconstruction of drug competition pattern, which is expected to accelerate the domestic substitution of varieties dominated by imported drug enterprises and bring opportunities to Chinese drug enterprises. At the same time, the industrial chain pattern will be reconstructed by volume procurement, and the API enterprises will take the initiative, which is expected to bring performance flexibility.
Investment strategy: Main Line 1: innovation Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) chain, including innovative drugs (machinery) and CXO. CDE’s new deal accelerates the evolution of China’s “new ecology” of innovation, and the industry is facing “re differentiation”. Pay attention to companies with clinical Oriented Innovation Ability and license out ability. It is suggested to pay attention to: Jiangsu Hengrui Medicine Co.Ltd(600276) , Baiji Shenzhou, Xinda biology, Corning Jerry, Shenzhen Chipscreen Biosciences Co.Ltd(688321) . In terms of {300O}, we are more inclined to focus on {300O} and {300O} in terms of policy and {300O}, and we are more inclined to maintain {300O} and {300O}. Main line 2: products go to sea. The overseas market is a huge incremental market, there is a high threshold for the export of preparations, and the export of medical devices to the sea has also become a new growth driving force of the industry. It is suggested to pay attention to: Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) , Hainan Poly Pharm.Co.Ltd(300630) , Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) , etc. Main line 3: consumer healthcare. With the growth of per capita disposable income, the demand for consumer medical care continues to increase. At the same time, consumer medical products are self funded products, with independent pricing power and immunization fee control policy. It is suggested to pay attention to: Topchoice Medical Co.Inc(600763) , Aier Eye Hospital Group Co.Ltd(300015) , Yantai Zhenghai Bio-Tech Co.Ltd(300653) , etc. Main line 4: the traditional Chinese medicine sector has been in the adjustment stage for a long time, and the overall valuation is low. Enterprises with steady performance growth in the sector have high cost performance and prominent layout advantages. Moreover, the export of traditional Chinese medicine products is small and the internal circulation attribute is obvious, so it will not be disturbed by foreign policies towards China. Some traditional Chinese medicine products are more inclined to health care products with stronger consumption attributes, which can be benchmarked with some food enterprises. On this premise, we believe that the subject matter with sufficient adjustment and low valuation deserves special attention. Among them, enterprises with a larger proportion of OTC drugs in the fee control policy of immune medical insurance, better room for price increase of products and a smaller proportion of traditional Chinese medicine injections have greater flexibility. It is suggested to pay attention to: Henan Lingrui Pharmaceutical Co.Ltd(600285) , Kpc Pharmaceuticals Inc(600422) , etc. In addition to the above three main lines, there are also some other tracks with high prosperity and high barriers: including characteristic API and nuclear medicine. It is suggested to pay attention to: Zhejiang Starry Pharmaceutical Co.Ltd(603520) , Jiangxi Fushine Pharmaceutical Co.Ltd(300497) , Zhejiang Tianyu Pharmaceutical Co.Ltd(300702) , Yantai Dongcheng Biochemicals Co.Ltd(002675) , and Yuanda medicine.
Industry highlights: 1) the State Food and Drug Administration approved the import registration of covid-19 therapeutic drug paxlovid of Pfizer under emergency conditions; 2) Yuanda pharmaceutical yttrium [90Y] resin microspheres (SIR spheres) were approved for listing; 3) Aivonib tablets, the first IDH1 inhibitor of cornerstone pharmaceutical in China, was approved in China for the treatment of patients with acute myeloid leukemia; 4) The new drugs briviact (buvasetam) and vimpat (lacosamide) for childhood epilepsy of youshibi have been recommended and approved by the European Union CHMP.
Market review: last week, the A-share pharmaceutical sector fell 2.73%, the Shanghai and Shenzhen 300 index rose 0.82% in the same period, and the pharmaceutical industry ranked 26th among 28 industries. Last week, the H-share pharmaceutical sector fell 4.80%, and the Hang Seng Composite Index rose 1.67% in the same period. The pharmaceutical industry ranked 11th among 11 industries.
Risk tips: 1) policy risk: policies such as medical insurance fee control and drug price reduction have a great negative impact on the industry; 2) R & D risk: pharmaceutical R & D investment is large and difficult, and there is the possibility of R & D failure or slow progress; 3) Corporate risk: the company’s operation does not meet expectations.
