Ping An View:
Industry view: the current valuation of traditional Chinese medicine is cost-effective, so it is recommended to pay active attention. In the context of medical insurance fee control, the auxiliary drug varieties represented by traditional Chinese medicine injections were suppressed, resulting in a long-term correction in the overall performance and valuation of the traditional Chinese medicine sector. The traditional Chinese medicine sector has obvious internal circulation characteristics in terms of drug planting, drug production and terminal consumption, and is not affected by external policies towards China. OTC varieties of traditional Chinese medicine are similar to food and beverage products and have obvious consumption attributes. First, it focuses on the off-site market, does not occupy medical insurance, and is less affected by centralized mining; Second, the enterprise has certain independent pricing power and has the expectation of price increase. It is suggested to pay active attention to the traditional Chinese medicine sector and stock selection ideas: 1) the target with stable fundamentals, sufficient adjustment and high valuation cost performance; 2) Mainly OTC varieties, low proportion of traditional Chinese medicine injections and strong R & D ability of new traditional Chinese medicine; 3) The consumption attribute is strong, and the core products should have the expectation of price increase. Based on the above analysis, it is recommended to pay attention to Henan Lingrui Pharmaceutical Co.Ltd(600285) , Kpc Pharmaceuticals Inc(600422) , Jianmin Pharmaceutical Group Co.Ltd(600976) , Mayinglong Pharmaceutical Group Co.Ltd(600993) , Hubei Jumpcan Pharmaceutical Co.Ltd(600566) , Beijing Tongrentang Co.Ltd(600085) , Guangyuyuan Chinese Herbal Medicine Co.Ltd(600771) , Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Hainan Huluwa Pharmaceutical Group Co.Ltd(605199) , etc.
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 “new ecology” of innovation, and the industry is facing “re differentiation”. 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 tracks by maintaining a high outlook. We suggest paying 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 going to sea of medical devices 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) , Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) , Micro-Tech (Nanjing) Co.Ltd(688029) , Shanghai Microport Endovascular Medtech (Group) Co.Ltd(688016) . Main line 3: consumer healthcare. With the growth of per capita disposable income, the demand for consumer medical care is increasing. 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) , Jinxin reproduction. 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) , and Yuanda medicine.
Industry highlights: 1) Notice on the list of DRG / Dip payment demonstration sites issued by the office of the National Medical Security Bureau; 2) The State Food and Drug Administration approved the first innovative neutralizing antibody combination therapy for covid-19 pneumonia in China; 3) FDA granted the fast track qualification of lecanemab (ban2401), a new Alzheimer’s drug, to Eisai and Bojian; 4) bevacizumab injection of Dongyao pharmaceutical was approved for marketing for colorectal cancer and non-small cell lung cancer.
Market review: last week, the A-share pharmaceutical sector rose 0.53%, the Shanghai and Shenzhen 300 index fell 0.67% in the same period, and the pharmaceutical industry ranked 10th among 28 industries. Last week, the H-share pharmaceutical sector fell 2.02%, the Hang Seng Composite Index rose 0.21% in the same period, and the pharmaceutical industry ranked 10th 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) Company risk: the company’s operation does not meet expectations.
