Core view
Zhou viewpoint: the first domestic covid-19 specific drug was approved by EUA, and the investment opportunities of covid-19 specific drugs were analyzed.
Medicine is an industry with obvious policy impact. From historical experience, the second half of the year, especially the fourth quarter, is the centralized period for the introduction and implementation of various pharmaceutical policies. In August, the third batch of drugs with volume was intensively purchased and landed, and 125 enterprises were proposed to win the bid, with a total of 191 products, with an average decrease of 53% and a maximum decrease of 95%; In November, the first round of intensive procurement of high-value consumables for coronary stents was launched. It is planned to select 8 enterprises with a total of 10 products, with an average price reduction of 93%; On December 8, the fourth batch of national drug centralized procurement varieties and relevant procurement data began to be submitted, involving 44 varieties and about 90 product specifications; From December 14 to 16, the 2020 national health insurance negotiation took three days to complete, and the negotiation results have yet to be officially announced. The central economic work conference has just ended. Although there is no special discussion on medicine, the relevant policies and guidelines have outlined the general trend of the future development of the pharmaceutical industry. The reform of the pharmaceutical supply side and the improvement of the efficiency of medical public service expenditure have been fully launched and deepened. Medical insurance negotiation and intensive purchase with volume are powerful weapons to improve the efficiency of medical expenditure. We suggest that the strategy should focus on the pharmaceutical innovation Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) chain. Since 2015, under the guidance of the policy baton, the differentiation of the pharmaceutical industry has become the norm. We clearly put forward in the investment strategy of the pharmaceutical industry in 2021: focus on three main lines, policy immunization, great innovation and independent devices. The central economic work conference also stressed the need to promote high-quality development and take reform, innovation and development as the fundamental driving force. We suggest to strategically value the pharmaceutical innovation Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) chain, first, the pharmaceutical outsourcing service industry (CXO) for service innovation R & D / manufacturing, and second, the practitioner of innovation R & D – innovative pharmaceutical enterprises.
Market review: the biomedical sector rose by 1.08% this week, ranking 11th in all SW primary industries. Since the beginning of this year, pharmaceutical biology has fallen by 6.93%, 3.93 percentage points lower than Shanghai and Shenzhen 300 index, ranking 22nd in all SW primary industries. In terms of industry segments, the pharmaceutical and biological segments rose more or less this week, with the largest increase in pharmaceutical business, up 4.53%, and the largest decrease in chemical raw materials, down 1.64%. Since the beginning of this year, the performance of chemical raw materials and traditional Chinese medicine has been the best, up 26.30% and 16.31% respectively since the beginning of the year; Chemical agents were the weakest performing sub industry, down 23.48%. Chemicals (- 23.48%), pharmaceutical commerce (- 21.28%), biological products (- 14.63%) and medical devices (- 11.04%) underperformed the pharmaceutical and biological (SW) industry index.
In terms of performance of individual stocks, the top five stocks that rose last week were: Yixintang Pharmaceutical Group Co.Ltd(002727) (17.86%), Guangyuyuan Chinese Herbal Medicine Co.Ltd(600771) (17.67%), Guilin Sanjin Pharmaceutical Co.Ltd(002275) (16.96%), Yifeng Pharmacy Chain Co.Ltd(603939) (14.41%) and Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) (13.82%). The top five stocks that fell were: Shanghai Allist Pharmaceuticals Co.Ltd(688578) – U (- 13.56%), St Baihua (- 12.73%), Beijing Strong Biotechnologies Inc(300406) (- 10.99%), Berry Genomics Co.Ltd(000710) (- 10.41%) and Beijing Bohui Innovation Biotechnology Group Co.Ltd(300318) (- 10.24%).
Valuation: this week’s valuation showed an upward trend. As of Friday (December 10), PE (TTM) and Pb (LF) in the pharmaceutical and biological (SW) industry were 34.8 times and 4.32 times respectively.
Risk warning: medical policy risk; Lower prices than expected; Systemic risk.
