Market review. The Hang Seng Index fell 0.17% to 23954 points, the Science Index / national index fell 0.2% / 0.32% to 6022 / 8551 points, and the market turnover reached 129.692 billion yuan. The central economic work conference proposed that it is necessary to correctly understand and grasp the carbon peak and carbon neutralization, and reiterated that it is necessary to deeply promote the energy revolution based on the basic national conditions of coal, and a number of relevant sectors have achieved outstanding performance. Datang International Power Generation Co.Ltd(601991) (991hk) rose 6.7%, China Resources Power (836hk) rose 4.3%, Huaneng (902hk) rose 2.5%, and China Power (2380hk) rose 1.7%; In terms of green energy stocks, Longyuan (916hk) rose 2.7%, CGN new energy (1811hk) rose 1.5%, Xintian green (956hk) rose 2.5%, and Xinyi energy (3868hk) rose 2.7%; In terms of power equipment stocks, Harbin Electric (1133hk) rose 1.4%, Dongfang Electric Corporation Limited(600875) (1072hk) rose 3.4%, and power infrastructure unit China energy construction (3996hk) rose 12.4%. The central economic work conference pointed out that infrastructure investment should be carried out moderately in advance, and building materials and cement stocks should be built well, Anhui Conch Cement Company Limited(600585) (914hk) increased by 3%, and China building materials (3323hk) increased by 5%. The construction machinery sector was also popular, Sinotruk Jinan Truck Co.Ltd(000951) (3808hk) rose 17.9%, Zoomlion Heavy Industry Science And Technology Co.Ltd(000157) (1157hk) rose 5.2%, and Weichai (2338hk) rose 2.5%. The mainland continued to adhere to the policy of housing, housing and non speculation, and domestic housing stocks were generally under pressure. Shimao Group (813hk) fell 12%, rongchuang China (1918hk) and Yajule group (3383hk) fell more than 6%, and Longhu (960hk) and Country Garden (2007hk) fell about 3%. In terms of biotechnology stocks, tengshengbo Pharmaceutical (2137hk) suspended the phase I clinical research of pre patent drugs, falling 14.2% throughout the day, Xinda Biology (1801hk) fell 5.7%, zaiding medicine (9688hk) fell 5.9%, Baiji Shenzhou (6160hk) fell 3.5%, Wuxi Apptec Co.Ltd(603259) (2359hk) fell 4.1%, and Yaoming Biology (2269hk) fell 2.3%.
Industry outlook strategy for 2022: technology, software and it services, pharmaceutical sector
(report link)
Science and technology sector: 5g + VR / AR innovation cycle, domestic substitution of semiconductors is unstoppable. The boom of the science and technology industry is expected to remain volatile and upward. In 2021, against the background of the impact of the global epidemic and Sino US trade frictions, the science and technology sector as a whole strengthened in the shock. Since the beginning of the year, the performance of the A / h science and technology industry sector has been high before and low after. The science and technology industry benefited from the recovery of the performance of the electronic industry chain after the epidemic and the acceleration of the domestic substitution process in the first half of the year, but was affected by the repeated epidemic in the second half of the year The shortage of supply chain and the decline of consumer demand led to plate fluctuations. Looking forward to 2022, considering the VR / AR cycle, optical innovation, 5g industrial policy support, semiconductor localization trend and terminal demand recovery, we expect the whole sector to maintain a high boom. At the same time, Sino US trade friction will become normalized. The upgrading of science and technology industry chain and innovation cycle in emerging fields will still be the focus of investment next year.
Software and it services: the software industry chain continues to upgrade. Since March 2021, affected by policy orientation and regulatory factors, A-share and Hong Kong stock technology sectors have started to callback. Year to date, the A-share CSI computer and Hong Kong Hang Seng technology index fell 5% and 22% respectively. From a fundamental point of view, the growth logic based on the new infrastructure has not changed. In 2022, the industry is expected to show a situation from low to high. In the first half of the year, it is suggested to pay attention to China soft international and Hangzhou Hikvision Digital Technology Co.Ltd(002415) with relatively low policy risk. In the second half of the year, with the gradual reduction of the marginal impact of policy supervision and the increase of liquidity, we should pay attention to the opportunities for the repair of Wanguo data and Mingyuan cloud valuation.
Pharmaceutical sector: innovation is the constant theme.
China is becoming the soil for global innovation and R & D, benefiting from 1) a large number of high-end overseas talents returning home to start businesses, laying the foundation for Chinese R & D talents; 2) Hong Kong and the science and Innovation Board liberalized the listing of unprofitable biotechnology companies to provide R & D funds for innovative enterprises; 3) With China’s accession to ICH, the drug regulatory system is in line with international standards, and China’s clinical data support overseas declaration; 4) The coverage of basic medical insurance for innovative drugs has accelerated, creating conditions for the successful commercialization of innovative drugs.
We believe that the value of China’s innovative drugs in the future lies in participating in international competition. Innovative drugs developed locally in China are going to the international market. For example, in November 2019, Zebutinib (Btk inhibitor) independently developed by Baiji Shenzhou has been approved by FDA to treat patients with mantle cell lymphoma, breaking the “zero record” of China’s original anti-cancer new drugs at sea. In addition, the external licensing cases of China’s innovative drugs are constantly breaking records. Our preferred biotechnology companies include Xinda Biology (1801hk), Tianjing Biology (imabus) and Baiji Shenzhou （BGNEUS,6160HK）。
