Market review: last week, the A-share pharmaceutical and biological index rose 0.53%, outperforming the CSI 300 index by 1.21pp and the gem composite index by 3.88pp, ranking 10 / 28, mainly due to the overall rise of the traditional Chinese medicine sector. The H-share Hang Seng medical health index fell 2.02%, underperforming the Hang Seng state-owned enterprise index by 1.83pp, ranking 11 / 11.
Tracking of R & D Progress of listed companies: last week, Ind applications of Jiangsu Hengrui Medicine Co.Ltd(600276) shr0302 tablets and pyrrolidinib maleate tablets were newly undertaken, and clinical applications of Jiangsu Hengrui Medicine Co.Ltd(600276) shr-1316 injection, shr-1501 for injection, shr-a1811 for injection and Shanghai Junshi Biosciences Co.Ltd(688180) js001sc injection were newly undertaken, The listing applications of Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) human erythropoietin injection and Corning Jerry’s recombinant human follicle stimulating hormone injection are newly undertaken. Bio-Thera Solutions Ltd(688177) biological adalimumab is in phase IV clinical practice; The 13 valent pneumococcal polysaccharide conjugate vaccine of Aimei Weixin biology and xzp-3621 of xuanzhu medicine are in phase III clinical trials; Lnk01001 of Lingke pharmaceutical and orbutinib of nuocheng Jianhua pharmaceutical are undergoing phase II clinical trials; Hz-h08905 of Hezheng medicine and tqb2916 of Zhengda Tianqing are undergoing phase I clinical trials.
This week’s view: the traditional Chinese medicine industry has stepped into high-quality development and is optimistic about the brand traditional Chinese medicine OTC and formula granule industry chain. The Chinese medicine sector rose sharply last week, which we believe is mainly related to the market style switching and the expectation of price rise in the industry. The undervalued traditional Chinese medicine sector has the logic of stable growth of domestic consumption, policies to encourage high-quality development and continuous price increase. It has been widely recognized by the fund under the background of style switching at the end of the year. By combing the industrial policies and investment logic of proprietary Chinese medicine and traditional Chinese medicine formula particles, we believe that the traditional Chinese medicine industry has entered a high-quality development stage, waiting for performance realization and value revaluation. Under the policy encouragement, traditional Chinese medicine enterprises inherit and develop, traditional Chinese medicine innovative medicine enterprises usher in the high-speed period of examination and approval, and the traditional Chinese medicine formula granule industry embraces market expansion, standard improvement and quality improvement. It is suggested to pay attention to three types of investment opportunities in the industrial chain of traditional Chinese medicine: 1. OTC of brand Chinese patent medicine: Chongqing Taiji Industry (Group) Co.Ltd(600129) , Tianjin Zhongxin Pharmaceutical Group Corporation Limited(600329) , Beijing Tongrentang Co.Ltd(600085) , Henan Lingrui Pharmaceutical Co.Ltd(600285) , Jianmin Pharmaceutical Group Co.Ltd(600976) , Yunnan Baiyao Group Co.Ltd(000538) ; 2. Traditional Chinese medicine formula granules: China traditional Chinese medicine (H) ( Chongqing Taiji Industry (Group) Co.Ltd(600129) parent company), Tianjin Chase Sun Pharmaceutical Co.Ltd(300026) , China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) ; 3. Traditional Chinese medicine pharmaceutical equipment: Zhejiang Canaan Technology Limited(300412) , Shinva Medical Instrument Co.Ltd(600587) , etc.
Investment strategy in 2022: know the constant changes, keep the integrity and innovate. Based on the changes and invariance of pharmaceutical investment, we believe that we should actively grasp the investment opportunities in the direction of innovation and internationalization in the future. Innovative drugs and vaccines, Xinda Biology (H) and Rongchang Biology (H) are recommended; Yaoming Biology (H), Pharmaron Beijing Co.Ltd(300759) , Shanghai Haoyuan Chemexpress Co.Ltd(688131) , Pharmablock Sciences (Nanjing) Inc(300725) are recommended for CXO; in the field of equipment and Life Sciences, Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) , minimally invasive medicine (H), Shinva Medical Instrument Co.Ltd(600587) , Amoy Diagnostics Co.Ltd(300685) , Iray Technology Company Limited(688301) are recommended; in terms of innovative cutting-edge technologies, pay attention to unlisted enterprises such as Aibo biology; in terms of domestic consumption, Jinxin reproduction (H) is recommended Lbx Pharmacy Chain Joint Stock Company(603883) 、 Shandong Wit Dyne Health Co.Ltd(000915) 、 Boya Bio-Pharmaceutical Group Co.Ltd(300294) 。
Risk analysis: price reduction risk of drugs / consumables; Industry “black swan” event; Risk of R & D failure.
