Report guide
On February 21, 2022, Beijing incorporated 16 assisted reproductive technology projects into medical insurance, raising the concept stock of assisted reproductive technology. The medical device sector as a whole is greatly affected by the policy, especially by the expectation of centralized purchase, and the market sentiment is relatively pessimistic. We believe that platform companies that can solve clinical pain points and have the ability of continuous innovation will eventually wash out the yellow sand and stand out.
Key investment points
Thinking this week: assisted reproduction into medical insurance, the development trend of medical devices?
On February 21, 2022, Beishi medical insurance bureau, together with Beijing Municipal Health Commission and Beijing Municipal Bureau of human resources and social security, issued the notice on regulating the price adjustment of some medical services, which included 16 common assisted reproductive technologies related to IVF into medical insurance. This is not the first time that the medical insurance project has caused a sensation. In April and August 2021, Beijing and Shanghai included Siasun Robot&Automation Co.Ltd(300024) related surgical procedures and consumables into the medical insurance respectively. The medical device sector is greatly affected by policies. Based on the current policy trends, we believe that under the background of centralized procurement, the selection of medical device companies should follow:
\u3000\u30001. Look for products that truly solve clinical pain points and meet the trend of national conditions. China’s medical level has gradually improved, but there are still many medical problems that have not been solved, such as cancer. In 2018, who proposed the global strategy for accelerating the elimination of cervical cancer to encourage vaccination, screening and treatment of cervical cancer, but there is still no effective solution for the promotion of liver cancer and lung cancer. Chinese medical device companies have been following the path of overseas leaders for too long. Today’s policies have changed China’s competitive environment. If medical device companies want sustainable development, they need to be brave in product innovation and be guided by clinical pain points. We suggest paying attention to tumor treatment, surgery Siasun Robot&Automation Co.Ltd(300024) , ischemic stroke, AI diagnosis and treatment with strong innovation, large market space and great development trend.
\u3000\u30002. Looking for a medical device platform company with continuous innovation and iteration of products. We believe that continuous updating and iteration ability is the top priority to judge the advantages and disadvantages of enterprises. With the advent of the era of centralized procurement, a single product innovation is often difficult to support the rapid development of enterprises, especially on the premise that the innovation trend is stronger and stronger, the product iteration is accelerated, and a large number of Chinese device products do not have unique clinical advantages, continuous innovation iteration is the driving force to support the rapid development of enterprises. For companies with lasting innovation and leading quality, centralized purchase is not only a risk but also an opportunity, which helps to improve the penetration rate of products and the market share of products, save the promotion cost of the company and promote good products into the clinic. Generally speaking, we believe that the construction of systematic product platform, high-quality products and lasting innovation ability are very important.
Based on the above analysis, we recommend focusing on platform companies with sustainable innovation ability, such as minimally invasive medicine, Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) etc.
This week’s performance: external policy expectations improved, and the manufacturing attribute sector increased significantly
The pharmaceutical sector rose 1.9% this week, outperforming the Shanghai and Shenzhen 300 index by 3.6 percentage points, ranking sixth in all industries. In terms of trading volume, the turnover of the pharmaceutical industry this week was 475.2 billion yuan, accounting for 9.0% of the total turnover of all a shares, an increase of 0.1% over the previous week and 0.8pct higher than the central level since 2018. As of February 25, 2022, the overall valuation of the pharmaceutical sector (historical TTM, overall method, excluding negative values) was 30 times, up 0.5pct month on month, significantly lower than the central level since 2011 (pe38 times). The valuation premium rate of the pharmaceutical industry relative to the CSI 300 was 141.7%, an increase of 10.7 PCT over the previous week, significantly lower than the central level in the past four years (182.3%).
According to the classification of wind CITIC medicine, according to the classification of wind CITIC medicine, this week, traditional Chinese medicine decoction pieces (down 0.4%), pharmaceutical circulation (down 0.3%), and other sub industries of medicine ushered in general rise, among which chemical raw materials (up 4.4%) and medical services (up 3.7%) increased significantly. Considering that CITIC pharmaceutical classification involves cross businesses of some companies, according to the classification of key companies of Zheshang pharmaceutical, pharmaceutical services (up 4.3%) and characteristic API enterprises (up 3.3%) continued to rise this week, and scientific research services (up 2.9%) also had a good increase.
Pharmaceutical investment strategy in 2022: grasp manufacturing and welcome innovation
We suggest that investors should break the “core assets” and “sector concept” so that they can look at the investment opportunities in the upstream and manufacturing links with the industrial chain thinking, and the innovative pharmaceutical machinery will continue to survive the fittest during the transition period. We believe that in 2022, medicine should adhere to the investment strategy of “grasping manufacturing and welcoming innovation”.
Specifically, it is recommended to focus on:
1) manufacturing sector: API, cdmo and other subdivided fields, recommended Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) , Apeloa Pharmaceutical Co.Ltd(000739) , Wuxi Apptec Co.Ltd(603259) , Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) , Porton Pharma Solutions Ltd(300363) , Hainan Poly Pharm.Co.Ltd(300630) , etc.
2) upstream: the upstream: pharmaceutical equipment, reagents, consumables, and other fields of pharmaceutical equipment, reagents, and consumables, and the upstream: the upstream: the fields of pharmaceutical equipment, reagents, consumables, and so on, and the fields of pharmaceutical equipment, reagents, and so on, and the fields of pharmaceutical equipment, reagents, and consumables, and the upstream: the upstream: the upstream: the fields of pharmaceutical equipment, reagents, consumables, and so on, and the fields of pharmaceutical equipment, and so on, and the fields of pharmaceutical equipment, reagents, and consumables, and so on, and the fields of pharmaceutical equipment, such as the fields of pharmaceutical equipment, and so on, and the recommendations are recommended for senszonzonzonzonpine international, and the Tofflon Science And Technology Group Co.Ltd(300171) Tofflon Science And Technology Group Co.Ltd(300171) Tofflon Science And Technology Group Co.Ltd(300171) Shanghai Titan Scientific Co.Ltd(688133) \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Qingdao Novelbeam Technology Co.Ltd(688677) etc.
3) innovation: for international equipment and pharmaceutical companies, it is recommended to pay attention to Micro-Tech (Nanjing) Co.Ltd(688029) , minimally invasive medicine, Beijing Balance Medical Technology Co.Ltd(688198) , Baiji Shenzhou, Xinda biology, Shanghai Junshi Biosciences Co.Ltd(688180) , kangfang biology, etc.
4) others: Other: consumer attributes, medical services, innovative supporting industry companies, medical services, and innovative supporting industry companies, recommending companies with consumer attributes, medical services, and innovative supporting industries, recommending companies with Hangzhou Tigermed Consulting Co.Ltd(300347) \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ etc
Risk tips
Changes in industrial policies; The price reduction of core products exceeded expectations; R & D progress is less than expected.
