Market review:
In 2021, the pharmaceutical sector experienced shock correction and valuation digestion. As of December 14, 2021, CITIC pharmaceutical index fell by 5.09%, 0.94 percentage points lower than CSI 300 index, ranking 26th among 30 CITIC primary industries. CITIC pharmaceutical PE (TTM, excluding negative values) was 33.7x, reaching a historical 30.7% quantile, and the valuation premium rate of the pharmaceutical sector was 147.8%, reaching a historical 29.7% quantile, lower than the historical average (175.4%), and in a lower position since 2006.
Focus on the invariance in change and look for opportunities for relative certainty
With the continuous expansion of the impact of centralized mining, the opportunity at the investment level lies in that the foundation for the establishment of centralized mining is that “multiple enterprises supply mutually replaceable varieties, and the production capacity can be supplied indefinitely in theory”. The basis for enterprises to maintain product price and profit space is the competition pattern, and the dynamic excellent competition pattern lies in the ability to continuously develop products and product iteration, which remains unchanged.
Start DRG / Dip reform in 2022. As a means of payment, the core role of DRGs is to achieve a balance between improving the efficiency and quality of diagnosis and treatment and ensuring the sustainability of medical insurance through fine medical insurance management. Hospitals that cannot actively adapt to the rules of the game will be eliminated. The opportunity at the investment level lies in that excellent private medical institutions have paid more attention to cost control for a long time, with higher operation efficiency and competitive advantage.
The general trend of industrial development is: China Meheco Group Co.Ltd(600056) industrial manufacturing is upgraded, the competitiveness is continuously improved, and moves upstream in the global production value chain.
The competitiveness of upstream raw materials is prominent:
1) Biological “core” – life science support industrial chain: domestic enterprises have developed rapidly, reagent quality has reached the international leading level, and their competitiveness has been continuously improved. Entering the overseas market through global comparative advantages, China benefits from domestic alternative logic, with high growth and great development potential.
2) IVD raw materials and consumables: the covid-19 epidemic opens a window for the transfer of the global IVD raw materials and consumables production supply chain to China.
Accelerated internationalization process: with the breakthrough of key technologies of Chinese enterprises, not only the localization rate of the Chinese market is accelerating, but also some high-quality enterprises have the strength to compete with international giants.
Configuration idea in 2022:
Manufacturing upgrading of pharmaceutical industry and continuous improvement of Competitiveness:
Upstream: life science support industry chain, IVD raw materials and consumables, related targets: Nanjing Vazyme Biotech Co.Ltd(688105) , Sino Biological Inc(301047) , Acrobiosystems Co.Ltd(301080) ;
High end medical devices: endoscope and sequencer, related subjects: Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) , Qingdao Novelbeam Technology Co.Ltd(688677) , Sonoscape Medical Corp(300633) , Aohua endoscope, Micro-Tech (Nanjing) Co.Ltd(688029) ; Huada Zhizao (IPO application in progress);
International layout of medical devices, related subjects: Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) , Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) ;
Others: Jenkem Technology Co.Ltd(688356) , Shandong Pharmaceutical Glass Co.Ltd(600529) .
Focus on the supply pattern: blood products, related subjects: Beijing Tiantan Biological Products Corporation Limited(600161) , Boya Bio-Pharmaceutical Group Co.Ltd(300294) and Pacific Shuanglin Bio-Pharmacy Co.Ltd(000403) ; Desensitization preparation, related subject: Zhejiang Wolwo Bio-Pharmaceutical Co.Ltd(300357) .
Configuration idea in 2022:
Private medical service sector with differentiated competition. Ophthalmology, Aier Eye Hospital Group Co.Ltd(300015) ; Dentistry, Topchoice Medical Co.Inc(600763) ; Assisted reproduction, Jinxin reproduction; Cancer treatment services, Hagia.
Pharmacy sector. Related subjects: Yifeng Pharmacy Chain Co.Ltd(603939) , Dashenlin Pharmaceutical Group Co.Ltd(603233) , Lbx Pharmacy Chain Joint Stock Company(603883) and Yixintang Pharmaceutical Group Co.Ltd(002727) .
Aging and consumption upgrading.
Class II vaccine, related targets: Chongqing Zhifei Biological Products Co.Ltd(300122) , Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) and Changchun Bcht Biotechnology Co(688276) ;
Invisible orthodontics, related subjects: Angel of the times;
Household medical devices, aging demand and improvement of payment capacity, related subjects: Jiangsu Yuyue Medical Equipment And Supply Co.Ltd(002223) , Cofoe Medical Technology Co.Ltd(301087) , Sinocare Inc(300298) ;
Rehabilitation equipment – demand awakening and policy support, related subjects, Shenzhen Lifotronic Technology Co.Ltd(688389) , Xiangyumedicalco.Ltd(688626) , Nanjing Vishee Medical Technology Co.Ltd(688580) .
Risk tips: policy risk, product promotion risk less than expected, competition risk more than expected, safety production risk, performance risk less than expected, product R & D risk.
