Market review: last week, the A-share pharmaceutical and biological index rose 1.08%, underperforming the CSI 300 index by 2.06pp, outperforming the gem composite index by 2.11pp, ranking 11 / 28. Due to the rise of the RMB exchange rate, it was increased by northbound funds. The H-share Hang Seng medical health index fell 0.05% last week, underperforming the Hang Seng state-owned enterprise index by 1.5pp, ranking 10 / 11.
Tracking of R & D Progress of listed companies: last week, the ind application for bc0306 capsule of Shandong Buchang Pharmaceuticals Co.Ltd(603858) , Gan & Lee Pharmaceuticals(603087) gzr4 Shenzhen Salubris Pharmaceuticals Co.Ltd(002294) , bgb-23339 hydrochloride film coated tablets of Baiji Shenzhou was newly undertaken, and the clinical application for qls31906 for injection of Qilu pharmaceutical was newly undertaken. The methylene blue sustained-release tablets of kangzhe biology are in phase III clinical trial; Tianguangshi’s recombinant human monoclonal antibody mil86 injection and Xiamen Amoytop Biotech Co.Ltd(688278) Y-type pegylated recombinant human growth hormone injection are in phase II clinical practice; Shr-1901 injection, shr-1909 injection and shr8554 injection of Jiangsu Hengrui Medicine Co.Ltd(600276) are in phase I clinical trials.
This week’s view: the depth adjustment of the pharmaceutical sector ushers in a good opportunity for the layout of the sector
Looking back on the recent market performance, we can see that the large consumption sector has warmed up as a whole, the attention of the pharmaceutical sector has also increased, and the rebound performance is good. Focusing on the first half of 2022, we believe that this is a good time for the layout of the pharmaceutical sector. The main reasons include: 1) the valuation pressure of the pharmaceutical sector has been released: the decline range of the pharmaceutical and biological sector has reached about 15% since the high point of 2021.6. The PE (TTM) of the pharmaceutical and biological sector has been callback to about 34x, and the valuation pressure has been fully released. 2) The bad policy of the pharmaceutical industry has been cleared: the results of the medical insurance negotiation have been announced, which are generally in line with market expectations. The suppression of the short-term valuation of the innovation Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) chain has been lifted, and the layout opportunity has been ushered in. 3) Epidemic prevention needs exist for a long time: mutant strains continue to appear. It is expected that the covid-19 industrial chain required to combat the epidemic will exist for a long time, which will drive the performance growth of relevant enterprises. 4) Recovery of terminal demand: as China’s epidemic prevention and control measures become more and more mature and stable, the passenger flow of terminals will gradually return to steady growth, which will bring significant recovery to pharmaceutical consumer enterprises. Suggestions: 1) pharmaceutical consumption: Yixintang Pharmaceutical Group Co.Ltd(002727) , Yifeng Pharmacy Chain Co.Ltd(603939) , Lbx Pharmacy Chain Joint Stock Company(603883) in drugstores, and Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) , Yunnan Baiyao Group Co.Ltd(000538) , Beijing Tongrentang Co.Ltd(600085) in traditional Chinese medicine consumption. 2) Epidemic prevention industry chain: Shinva Medical Instrument Co.Ltd(600587) of pharmaceutical equipment sector, etc. 3) Innovation Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) chain: Rongchang biology and Xinda biology of innovative drugs, and Asymchem Laboratories (Tianjin) Co.Ltd(002821) of CXO plate.
Investment strategy in 2022: know the constant changes, keep the integrity and innovate. Based on the changes and invariance of pharmaceutical investment, we believe that we should actively grasp the investment opportunities in the direction of innovation and internationalization in the future. Innovative drugs and vaccines, Xinda Biology (H) and Rongchang Biology (H) are recommended; Yaoming Biology (H), Pharmaron Beijing Co.Ltd(300759) , Shanghai Haoyuan Chemexpress Co.Ltd(688131) , Pharmablock Sciences (Nanjing) Inc(300725) are recommended for CXO; in the field of equipment and Life Sciences, Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) , minimally invasive medicine (H), Shinva Medical Instrument Co.Ltd(600587) , Amoy Diagnostics Co.Ltd(300685) , Iray Technology Company Limited(688301) are recommended; in terms of innovative cutting-edge technologies, pay attention to unlisted enterprises such as Aibo biology; in terms of domestic consumption, Jinxin reproduction (H) is recommended Lbx Pharmacy Chain Joint Stock Company(603883) 、 Shandong Wit Dyne Health Co.Ltd(000915) 、 Boya Bio-Pharmaceutical Group Co.Ltd(300294) 。
Risk analysis: price reduction risk of drugs / consumables; Industry “black swan” event; Risk of R & D failure.
