The Q1 base caused by the covid-19 epidemic in 2020 is low. The stock price of the pharmaceutical industry will decline with the performance in 2021. We expect that the performance fluctuation caused by the epidemic in 2022 will gradually subside, and the apparent performance growth of the pharmaceutical industry is expected to rebound from the bottom after Q1 in 2022. At present, the valuation of the pharmaceutical industry is 32 times, which is in the bottom range of the past 10 years. In addition to the pharmaceutical fund, the pharmaceutical position in H1 is 11.24%, which is also at a historically low level. We believe that the pessimistic expectation of the policy has been basically released, and the pharmaceutical industry is expected to restructure its valuation in 2022. Investment opportunities in the pharmaceutical industry in 2022 may be reflected in the following four directions:
The importance of basic scientific research and upstream raw materials is upgraded, and domestic substitution is accelerated
Under the background of China's advanced manufacturing and rejuvenating the country, the development of basic scientific research and the independent control of basic raw materials are imminent. The fourteenth five year plan specifically proposes that the R & D investment of the whole society will increase by more than 7% annually, and puts forward the strategic importance in this field from the national top-level strategy. We expect that social scientific research investment will grow rapidly in the next few years driven by policies, and is expected to increase from 18.9% in 2019 to more than 20%.
Globalization of drugs and devices, innovation + globalization breeds large market value enterprises
The epidemic has led to a surge in global demand for medical products, and Chinese brands have rapidly established popularity and gradually accumulated public praise. After covid-19, the global economy is depressed, and China's medical devices with high cost performance and fast iteration are expected to become a new favorite of medical infrastructure; Centralized purchase policy and new drug price negotiation force Chinese innovative drug enterprises to return to the source and make source innovation. The internationalization of innovative drugs is the general trend. At present, six varieties of innovative drugs declared by Chinese enterprises in the United States are in the BLA / NDA stage and are expected to be approved by FDA for listing next year to accelerate the internationalization process of innovative drugs.
Global pharmaceutical manufacturing capacity has migrated to China, and China's cdmo field has grown rapidly
Covid-19 virus continues to mutate under the global epidemic, and the epidemic prevention and control in China is good, ensuring the continuous supply of manufacturing capacity. CXO, especially cdmo, has stronger stability in supply, undertaking delivery and quality. We believe that the signing of large orders by leading enterprises (such as small molecule covid-19 oral medicine) will occupy the production capacity, overflow some conventional orders to other cdmo enterprises, boost the industry performance in the short term and improve the industry status in the long term.
In the post epidemic era, there is a strong demand for medical infrastructure, and medical equipment infrastructure is the first
Global basic public health construction is generally insufficient, and medical infrastructure planning in the post epidemic era has been put on the agenda. Since 2020, the issuance of medical related bonds in some provinces of China has accelerated the layout of China's medical infrastructure. In addition, overseas countries represented by Spain, France and Italy have also launched corresponding new medical infrastructure schemes, which is expected to stimulate the demand of the medical device industry.
Key individual stocks: A-share portfolio: Shanghai Allist Pharmaceuticals Co.Ltd(688578) , Porton Pharma Solutions Ltd(300363) , Acrobiosystems Co.Ltd(301080) , Zhejiang Gongdong Medical Technology Co.Ltd(605369) , Jiangsu Hengrui Medicine Co.Ltd(600276) , Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) , Pharmaron Beijing Co.Ltd(300759) , Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) , Micro-Tech (Nanjing) Co.Ltd(688029) , Nanjing Vazyme Biotech Co.Ltd(688105) , Suzhou Nanomicro Technology Co.Ltd(688690) , Sansure Biotech Inc(688289) , Hangzhou Tigermed Consulting Co.Ltd(300347) , Wuxi Apptec Co.Ltd(603259) , Sino Biological Inc(301047) , etc. Hong Kong stock portfolio: haijiya, Cansino Biologics Inc(688185) , jinsirui, Xinda biology, Yaoming biology, kangfang biology, etc.
Risk statement
Trade friction; Medical policy risk; Performance does not meet expectations; Epidemic fluctuation, etc
