Key investment points
This week (2022.2.7-2022.2.11) and year to date, the increase of the pharmaceutical index was – 2.73% and – 17.27% respectively, and the excess return relative to the Shanghai index was – 6% and – 13% respectively; This week, the stock prices of pharmaceutical business, biological products and traditional Chinese medicine were relatively strong, while the stock prices of services, devices and chemical drugs were relatively weak; This week, the increase was among the top Shenzhen Yhlo Biotech Co.Ltd(688575) (+ 38%), Truking Technology Limited(300358) (+ 15%), Chongqing Zhifei Biological Products Co.Ltd(300122) (+ 14%), and the decrease was among the top drug Ming organisms (- 29%), Zhejiang Ausun Pharmaceutical Co.Ltd(603229) (- 23%) and Xinxiang Tuoxin Pharmaceutical Co.Ltd(301089) (- 22%). Performance characteristics of rise and fall: with the decline of the market, institutional heavy positions in pharmaceutical stocks decreased significantly, such as CXO and medical services; The undervalued Chinese medicine sector is still relatively strong; The equipment can be controlled independently, with a large increase, Truking Technology Limited(300358) , Tofflon Science And Technology Group Co.Ltd(300171) and so on. The pharmaceutical sector adjusted significantly this week, with more market factors and little change in industry fundamentals. In particular, the indication of non Lin non-small cell lung cancer of Xinda biological PD1 was temporarily rejected by FDA on Friday. The large decline this week was mainly concentrated in the CXO sector, which was mainly due to the excessive concentration of the bull market chip structure in the past three years, and the panic caused by the temporary inclusion of YaoMing biology in the UVL list. Generally speaking, the peg of CXO leaders such as Kangming Kant, Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Porton Pharma Solutions Ltd(300363) is equal to or less than 1, and the CXO sector is at the bottom of the valuation. From the perspective of industry prosperity and chip structure, the traditional Chinese medicine sector, independent and controllable equipment, blood products and vaccine sector are more attractive. In addition, the share price of innovative drugs began to decline from the second half of 2021, with a decline of more than 60-70%. Coupled with the last blow of Xinda incident, the benefits of innovative drugs outweigh the risks. It is suggested to allocate innovative drugs strategically.
The CXO sector has entered the lower value quintile, the industry demand has not decreased, and has the value of equipment: in 2022, the average p / E ratio of China’s mainstream CXO companies was 41 times, and the average peg was 0.93. Compared with foreign CXO companies, we believe that the valuation of A-share CXO has been greatly digested. China’s leading CXO companies have cooperated with leading pharmaceutical companies in the United States for many years and have undertaken a large number of covid-19 drug orders. If American pharmaceutical companies replace CXO service providers, they need to pay high costs and bear high risks. Therefore, we still believe that it is unlikely that China’s leading CXO companies will be included in the entity list. Yaoming bio’s inclusion in UVL also has a very limited impact on the company and industry, and is expected to be removed from the list in the next few months. Looking back on the R & D investment of global and Chinese pharmaceutical enterprises, the number of new drug pipelines, the financing amount and financing amount of medical and health industry in 2021, we believe that CXO demand remains unchanged and still has sufficient momentum. The performance forecast of China CXO company in 2021 also shows that the visibility of CXO performance has never changed, and we think it has the value of equipment.
Shenzhen Yhlo Biotech Co.Ltd(688575) New Coronavirus antigen test kit was approved by Japan, and AstraZeneca gave up the candidate vaccine AZD2816. China’s approved cornerstone pharmaceutical company, Shenzhen Yhlo Biotech Co.Ltd(688575) , announced that in February 11th, New Coronavirus announced that the New Coronavirus antigen detection kit of its Japan cooperative partner medical biology institute obtained the “sales license for in vitro diagnostic products” issued by Japan PMDA in February 10th. On February 10, AstraZeneca abandoned the candidate vaccine named azd2816 due to the continuous decline of beta variant in the list of the most threatening variants; On February 9, the avonib tablet declared by cornerstone pharmaceutical has been approved in China, and the indication is recurrent or refractory acute myeloid leukemia.
Specific allocation ideas: 1) in the field of traditional Chinese medicine: it is recommended to pay attention to Zhejiang Jolly Pharmaceutical Co.Ltd(300181) , Hubei Jumpcan Pharmaceutical Co.Ltd(600566) , Dong-E-E-Jiao Co.Ltd(000423) , and recommend Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) ; 2) CXO field of generic drugs: recommend Baicheng medicine and pay attention to Beijing Sun-Novo Pharmaceutical Research Co.Ltd(688621) ; 3) Innovative drugs and industrial chain: Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) , Wuxi Apptec Co.Ltd(603259) , Asymchem Laboratories (Tianjin) Co.Ltd(002821) etc; 4) Biotech innovative drugs: Xinda biology, Yasheng medicine, etc. it is suggested to pay attention to kangfang biology; 5) API field: Jiangxi Synergy Pharmaceutical Co.Ltd(300636) , Zhejiang Starry Pharmaceutical Co.Ltd(603520) , it is recommended to pay attention to Apeloa Pharmaceutical Co.Ltd(000739) , Zhejiang Tianyu Pharmaceutical Co.Ltd(300702) ; 6) Vaccine field: Chongqing Zhifei Biological Products Co.Ltd(300122) , Shenzhen Kangtai Biological Products Co.Ltd(300601) , Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) etc; 7) Growth hormone field: Anhui Anke Biotechnology (Group)Co.Ltd(300009) etc., it is suggested to pay attention to Changchun High And New Technology Industries (Group) Inc(000661) ; 8) Medical service field: Aier Eye Hospital Group Co.Ltd(300015) , Topchoice Medical Co.Inc(600763) , Guizhou Xinbang Pharmaceutical Co.Ltd(002390) , etc. it is recommended to pay attention to Ningbo Sanxing Medical Electric Co.Ltd(601567) , haijiya; 8) In the field of blood products: Beijing Tiantan Biological Products Corporation Limited(600161) etc., it is recommended to pay attention to Boya Bio-Pharmaceutical Group Co.Ltd(300294) ; 9) Medical and aesthetic fields: Imeik Technology Development Co.Ltd(300896) , Huadong Medicine Co.Ltd(000963) , Bloomage Biotechnology Corporation Limited(688363) , Shanghai Haohai Biological Technology Co.Ltd(688366) etc; 10) Medical device field: Jiangsu Yuyue Medical Equipment And Supply Co.Ltd(002223) , Qingdao Novelbeam Technology Co.Ltd(688677) , Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) etc.
Risk tip: the progress of industrial transformation and internationalization is not as expected; R & D progress may be less than expected; The price reduction of drugs exceeded expectations; The medical insurance policy was further tightened.
