One week's view: the approval and listing of innovative traditional Chinese medicine has been significantly accelerated, and we are optimistic about the investment opportunities of innovative traditional Chinese medicine
On October 29, 2021, the State Council appointed Zhao Junning as deputy director of the State Drug Administration. Zhao Junning is an expert in the field of traditional Chinese medicine. He has rich experience in traditional Chinese medicine R & D. We believe that Zhao Junning's appointment as deputy director of the State Drug Administration is conducive to the development of traditional Chinese medicine innovative medicine industry. On September 28, 2020, the supporting document of the registration classification of traditional Chinese medicine "requirements for registration classification and application materials of traditional Chinese medicine" was officially released, emphasizing and promoting the innovation of traditional Chinese medicine. From the examination and approval of innovative traditional Chinese medicine, 2021 is the year with the most new traditional Chinese medicine approved in recent five years, Up to now, 11 innovative traditional Chinese medicine drugs have been approved for listing in 2021 (only 2 drugs have been approved for listing in 2020), and the approval and listing of innovative traditional Chinese medicine drugs has been significantly accelerated, indicating that the reform of China's traditional Chinese medicine review and approval system has achieved initial results.
One week's view: OTC of brand traditional Chinese medicine has the advantages of determining performance growth and valuation
In terms of policy, traditional Chinese medicine, as a kind of drugs with Chinese characteristics, has always been supported by national policies; From the perspective of the volume procurement of Chinese patent medicine that has been implemented, the centralized purchase price is not expected to decline like a cliff, but to ensure that traditional Chinese medicine enterprises have a certain profit space based on its cost, and the main sales channel of brand traditional Chinese medicine OTC is at the retail end rather than public medical institutions, which has a high price maintenance ability. In terms of fundamentals, most brand OTC enterprises of traditional Chinese medicine have maintained a stable growth of revenue of 10% - 20% in the past few years, and are expected to usher in the second growth curve through category expansion and marketing channel reform. In terms of performance, in 2021, many brand Chinese medicine OTC enterprises formulated equity incentive plans to fully motivate core employees and have great certainty of performance growth. In terms of valuation, according to Wande's unanimous expectation, as of December 24, 2021, the 2022epe of traditional Chinese medicine sector was 27 times, lower than 29 times of the overall pharmaceutical and biological industry, which has certain valuation advantages. Overall, the OTC industry of brand traditional Chinese medicine is supported by policies and has the advantages of determining performance growth and valuation.
This week, pharmaceutical and biological products rose 0.53% year-on-year, stronger than 0.93 pct of Shanghai Stock Exchange, with the largest increase in traditional Chinese medicine
From December 20 to December 24, 2021, the Shanghai Composite Index fell by 0.39%, the small and medium-sized board rose by 0.04%, the gem fell by 4%, and the pharmaceutical biology rose by 0.53% year-on-year. Among the pharmaceutical sub sectors, the traditional Chinese medicine sector rose the most, up 9.41%, the chemical pharmaceutical sector rose 2.38%, the medical device sector rose 1.48%, the pharmaceutical business sector rose 0.16%, the biological products sector fell 2.3%, and the medical service sector fell the most, down 5.7%. In terms of P / E ratio, as of December 24, 2021, the valuation of pharmaceutical biology was 33.8 times, and the premium rate for all A-Shares was 144.86%, including 34.7 times for chemical pharmacy, 35.3 times for traditional Chinese medicine, 33.1 times for biological products, 16.9 times for pharmaceutical commerce, 24.6 times for medical devices and 66.2 times for medical services.
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Risk tip: the black swan incident and the deterioration of the epidemic situation in the industry affect production and operation.
