Industry trends:
1) Recently, the national medical insurance administration and other departments released the adjustment results of the national medical insurance drug catalog in 2021. In this adjustment, a total of 74 drugs were added to the catalog, and 11 drugs were transferred out of the catalog. From the perspective of negotiation, 67 kinds of exclusive drugs outside the catalogue were successfully negotiated, with an average price reduction of 61.71%. After adjustment, the total number of drugs in the national medical insurance drug catalogue is 2860, including 1486 kinds of Western medicine and 1374 kinds of Chinese patent medicine. There are still 892 kinds of decoction pieces of traditional Chinese medicine.
2) On November 19, 2021, the National Medical Insurance Bureau formulated the three-year action plan for DRG / Dip payment reform, which made it clear that by the end of 2025, DRG / Dip payment will cover all qualified medical institutions carrying out inpatient services, and basically realize the full coverage of diseases and medical insurance funds.
Market observation:
Recently, the overall pharmaceutical market has been divided. Last week, the pharmaceutical and biological sector rose 1.08% (ranking 11 / 28), and the sector has fallen 6.93% (ranking 22 / 28) year to date.
Investment thinking: some traditional Chinese medicine enterprises are expected to usher in double recovery of valuation and operation
In the three years since 2018, the share price performance of traditional Chinese medicine has significantly underperformed that of other fine molecular medicine sectors, We believe that the main influencing factors include: the impact of medical insurance fee control (especially traditional Chinese medicine injections), worries about the adjustment of medical insurance catalogue, the adjustment of enterprise product operation, etc. at the current time point, the valuation of a considerable number of traditional Chinese medicine companies has been at a relatively low level for a long time, but from the perspective of business performance, some companies have shown some upward flexibility. In addition, some companies have begun to appear in business management, product sales, transformation and upgrading recently Positive changes, we expect that some traditional Chinese medicine companies are expected to usher in the double repair of valuation and operation. It is suggested to pay attention to: Beijing Tongrentang Co.Ltd(600085) , Hubei Jumpcan Pharmaceutical Co.Ltd(600566) , Henan Lingrui Pharmaceutical Co.Ltd(600285) , Jianmin Pharmaceutical Group Co.Ltd(600976) , etc.
Investment strategy:
From the perspective of the next half year, we suggest to select individual stocks with the idea of “cost performance strategy”, and screen them on the premise of the matching of valuation, performance trend and stock price catalysis.
——① Medical services. At present, the price adjustment of local medical services has entered a window period, and the recent rehabilitation medical support policies have been further implemented to promote the development of the industry.
——② Policy expected repair: a) the inflection point of volume procurement has appeared. From the perspective of volume procurement of joints and insulin, both regulatory authorities and bidding enterprises are more rational; b) The negotiation results of the national medical insurance catalogue were better than expected (especially some large varieties), reflecting that innovative drugs are highly encouraged and supported by policies.
——③ Improvement of operating performance: after a long-term operation and stock price adjustment, the operation of some sector companies (such as traditional Chinese Medicine) basically hit the bottom, and the subsequent performance is expected to grow steadily
Recent stock selection ideas (in order):
1) Medical services: Ningbo Sanxing Medical Electric Co.Ltd(601567) , Xi’An International Medical Investment Company Limited(000516) , Topchoice Medical Co.Inc(600763) , Jinxin reproduction (H), Aier Eye Hospital Group Co.Ltd(300015) ;
2) Traditional Chinese medicine: Beijing Tongrentang Co.Ltd(600085) (recommended concern), Jianmin Pharmaceutical Group Co.Ltd(600976) (recommended concern), Henan Lingrui Pharmaceutical Co.Ltd(600285) (recommended concern), Hubei Jumpcan Pharmaceutical Co.Ltd(600566) (recommended concern)
3) CXO: Wuxi Apptec Co.Ltd(603259) , Hangzhou Tigermed Consulting Co.Ltd(300347) , Pharmaron Beijing Co.Ltd(300759) (attention recommended), Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Porton Pharma Solutions Ltd(300363)
4) Medical devices: Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) , Eyebright Medical Technology(Beijing) Co.Ltd(688050) , Micro-Tech (Nanjing) Co.Ltd(688029) , Autek China Inc(300595) (attention recommended), angel of the times (H);
5) Chain drugstores: Yixintang Pharmaceutical Group Co.Ltd(002727) , Lbx Pharmacy Chain Joint Stock Company(603883) ;
6) Innovative drugs: Cinda Biology (H), Yifan Pharmaceutical Co.Ltd(002019) , Shanghai Junshi Biosciences Co.Ltd(688180)
7) Selected stocks: Kingsley Biotechnology (H), modern dentistry (H), minimally invasive medicine (H)
Risk tip: market shock risk, R & D progress is less than expected, extension integration of individual companies is less than expected, and epidemic risk
