Market review of the past week
The rise and fall of major indexes in the past week (2.7 – 2.11): Shenwan pharmaceutical and biological industry index (- 2.73%), Shanghai Composite Index (3.02%), Shenzhen Component Index (- 0.78%), gem index (- 5.59%), Shanghai and Shenzhen 300 (0.82%). Chinese medicine ranked 29th in the rise and fall of Shenwan’s 31 primary industry indexes.
Among the 13 tertiary sectors of medicine, the top three are: vaccine (Shenwan) (6.39%), hospital (Shenwan) (1.66%), and medicine circulation (Shenwan) (1.36%); The top three declines were: medical R & D outsourcing (Shenwan) (- 16.22%), medical equipment (Shenwan) (- 4.15%), and other biological products (Shenwan) (- 3.27%).
Key investment points
(1) with one belt, one road and three drugs and three sides, the Chinese medicine will play an important role in the epidemic. At the same time, the policy of “one belt and one road” will be applied to encourage Chinese medicine enterprises to go abroad. The market of Chinese medicine will be broader in the future, especially the emphasis on new drug research and development, the emphasis on Chinese medicine treatment, and the rich and abundant TCM enterprises and pipeline. Enterprises with high brand awareness and recognition will benefit from it; (2) In the early stage, the biological products industry is mainly controlled by the epidemic situation, which is related to the downward demand for vaccines and other anti epidemic products in the future. However, in the medium and long term, the epidemic situation makes people pay more attention to preventive products, and the domestic substitution process of drugs with a high proportion of imports such as vaccines is accelerated, so we are optimistic about the trend of this sub industry in the future; (3) With the gradual disclosure of the annual report, after the fundamentals of the medical service sector are verified, the industry as a whole is expected to pick up;
(4) due to the impact of the epidemic, some parts of the bioreactor imported from the United States did not complete the routine on-site verification procedures and were included in the “unverified list” of the U.S. Department of Commerce. This incident has little impact on the normal production of YaoMing biology, but makes Chinese enterprises realize that continuously improving the localization of medical devices will be conducive to the stable operation of enterprises, It is conducive to the development of domestic medical devices. (5) With the increasing aging of China’s population, the scale of commonly used drugs for the elderly will continue to rise, superimposing the influence of prescription outflow policy. At the same time, the current online drug purchase software has problems such as complex operation, so it is optimistic about offline head chain pharmacies.
Investment advice
Recommended targets: 1) traditional Chinese medicine enterprises: Beijing Tongrentang Co.Ltd(600085) *, Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) *, Jianmin Pharmaceutical Group Co.Ltd(600976) *;
2) leading vaccine Enterprises: Chongqing Zhifei Biological Products Co.Ltd(300122) *; 3) Leading pharmaceutical outsourcing industry: Wuxi Apptec Co.Ltd(603259) *, Asymchem Laboratories (Tianjin) Co.Ltd(002821) *; 4) Leading enterprises in innovative medical devices and subdivided fields: Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) *, Tofflon Science And Technology Group Co.Ltd(300171) *, Beijing Wandong Medical Technology Co.Ltd(600055) *; 5) Chain drugstore leaders: Dashenlin Pharmaceutical Group Co.Ltd(603233) *, Yifeng Pharmacy Chain Co.Ltd(603939) *, Yixintang Pharmaceutical Group Co.Ltd(002727) *, Lbx Pharmacy Chain Joint Stock Company(603883) *. (*: no deep coverage yet)
Risk tips:
Risk that the progress of innovative drugs is less than expected; Market competition intensifies risks; The change of global epidemic situation exceeds the expected risk; Policy risk exceeding expectations.
