Ping An View:
Industry perspective: 16 assisted reproductive projects in Beijing are included in medical insurance, and the industry is expected to accelerate its development. On February 21, the Beijing Municipal Medical Insurance Bureau issued the notice on regulating and adjusting the price of some medical services, which included 16 assisted reproductive technology projects in the medical insurance reimbursement. The projects included in the medical insurance include in vitro fertilization, embryo culture, blastocyst culture and other 16 projects. Two of them are IUI (artificial insemination), one is second-generation IVF, three are third-generation IVF, and the rest are embryo storage and other projects. Through comparison, we found that the prices of these 16 items have not changed compared with the previous prices after the inclusion of medical insurance. We believe that assisted reproduction reflects the value of doctors’ technology and services, so the risk of price reduction is limited for the core technical services. At present, the average cost of IVF in a single cycle in China is about 3500045000 (excluding the third generation). This time, it has entered the medical insurance, and the medical insurance coverage is about 800011000 yuan. Recently, the state has made frequent policies to encourage fertility. We believe that assisted reproduction projects are expected to include medical insurance payment in more areas in the future.
We believe that the entry of assisted reproductive projects into medical insurance will accelerate the development of the industry, and the downstream medical service enterprises will take the lead in benefiting. China’s assisted reproductive drug market is still dominated by imports. If the drug market is intensively purchased in the future, it is expected to promote the reconstruction of the market competition pattern and bring opportunities to domestic pharmaceutical enterprises. It is suggested to pay attention to: Jinxin reproduction, Beikang medical treatment, Changchun High And New Technology Industries (Group) Inc(000661) , Livzon Pharmaceutical Group Inc(000513) .
Investment strategy: Main Line 1: create Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) chain, including innovative drugs (machinery) and CXO. CDE’s new deal accelerates the evolution of China’s innovation “new ecology”, and the industry is facing “re differentiation”. We should pay attention to companies with clinical Oriented Innovation Ability and license out ability. It is suggested to pay attention to: Jiangsu Hengrui Medicine Co.Ltd(600276) , Baiji Shenzhou, Xinda biology, Corning Jerry, Shenzhen Chipscreen Biosciences Co.Ltd(688321) . In terms of CXO, we prefer cdmo and macromolecular CXO track in combination with valuation, policy and capital factors. It is suggested to pay attention to: Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Porton Pharma Solutions Ltd(300363) , Pharmablock Sciences (Nanjing) Inc(300725) . Main line 2: products go to sea. The overseas market is a huge incremental market, there is a high threshold for the export of preparations, and the export of medical devices to the sea has also become a new growth driving force of the industry. It is suggested to pay attention to: Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) , Hainan Poly Pharm.Co.Ltd(300630) , Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) , etc. Main line 3: consumer healthcare. With the growth of per capita disposable income, the demand for consumer medical care continues to increase. At the same time, consumer medical products are self funded products, with independent pricing power and immunization fee control policy. It is suggested to pay attention to: Topchoice Medical Co.Inc(600763) , Aier Eye Hospital Group Co.Ltd(300015) , Yantai Zhenghai Bio-Tech Co.Ltd(300653) , etc. Main line 4: the traditional Chinese medicine sector has been in the adjustment stage for a long time, and the overall valuation is low. Enterprises with steady performance growth in the sector have high cost performance and prominent layout advantages. Moreover, the export of traditional Chinese medicine products is small and the internal circulation attribute is obvious, so it will not be disturbed by foreign policies towards China. Some traditional Chinese medicine products are more inclined to health care products with stronger consumption attributes, which can be benchmarked with some food enterprises. On this premise, we believe that the subject matter with sufficient adjustment and low valuation deserves special attention. Among them, enterprises with a larger proportion of OTC drugs in the fee control policy of immune medical insurance, better room for price increase of products and a smaller proportion of traditional Chinese medicine injections have greater flexibility. It is suggested to pay attention to: Henan Lingrui Pharmaceutical Co.Ltd(600285) , Kpc Pharmaceuticals Inc(600422) , etc. In addition to the above three main lines, there are also some other tracks with high prosperity and high barriers: including characteristic API and nuclear medicine. It is suggested to pay attention to: Zhejiang Starry Pharmaceutical Co.Ltd(603520) , Jiangxi Fushine Pharmaceutical Co.Ltd(300497) , Zhejiang Tianyu Pharmaceutical Co.Ltd(300702) , Yantai Dongcheng Biochemicals Co.Ltd(002675) , Yuanda medicine.
Highlights of the industry: 1) CDE released the working procedures of the drug review center for accelerating the review of innovative drug listing applications (Trial) (Draft for comments); 2) Roche cd20xcd3 bispecific antibody pralsetinib was granted orphan drug qualification by FDA; 3) Upatinib, the atopic dermatitis drug of aibowei, was approved in China; 4) Boehringer Ingelheim’s new drug of idiopathic pulmonary fibrosis (IPF) was granted the qualification of breakthrough drug by FDA.
Market review: the A-share pharmaceutical sector rose 1.71% last week, while the Shanghai and Shenzhen 300 index fell 1.67% in the same period. The pharmaceutical industry ranked sixth among 28 industries. Last week, the H-share pharmaceutical sector fell 1.22%, and the Hang Seng Composite Index fell 6.09% in the same period. The pharmaceutical industry ranked first among 11 industries.
Risk tips: 1) policy risk: policies such as medical insurance fee control and drug price reduction have a great negative impact on the industry; 2) R & D risk: pharmaceutical R & D investment is large and difficult, and there is the possibility of R & D failure or slow progress; 3) Corporate risk: the company’s operation does not meet expectations.
