Key investment points
Market review: this week, the pharmaceutical and biological index rose 0.53%, outperforming the Shanghai and Shenzhen 300 index by 1.21 percentage points, ranking 10th in the industry. Since the beginning of the 21st century, the pharmaceutical industry has fallen by 8.62%, 3.06 percentage points lower than the CSI 300 index, and the rise and fall of the industry ranks 25th. The valuation level (pe-ttm) of the pharmaceutical industry this week was 33.11 times, with a premium rate of 99% (+ 2PP) relative to all a shares, 47% (+ 1pp) relative to all A-Shares excluding banks, and 148% (+ 2PP) relative to CSI 300. In terms of pharmaceutical sub industry, the three sub industry sectors rose this week, and traditional Chinese medicine was the sub industry with the largest increase, up about 9.4%. Pharmaceutical business, medical devices, medical services and biological products rose flat. The sub industry with the highest increase since the beginning of the year is chemical API, up about 28.8%.
The industry has ushered in a turning point of development, focusing on traditional Chinese medicine consumer goods for medical insurance and immunization. We believe that there are three opportunities for the development of traditional Chinese medicine consumer goods: 1) since 2021, the price of upstream traditional Chinese medicine has continued to rise, especially the precious traditional Chinese medicine natural bezoar, Panax notoginseng and natural musk. There is a certain expectation of price increase for upstream raw materials + downstream products in the future; 2. Industry channel inventory clearing is coming to an end, and the superposition of price increase expectations has accelerated the downstream inventory turnover; 3) There are positive changes in the mixed reform of relevant state-owned enterprises and shareholders, and the future performance is expected to improve significantly. In addition, this week’s centralized collection of Chinese patent medicines in Hubei is mainly traditional Chinese medicine injections, and traditional Chinese medicine consumer goods are relatively immune to medical insurance. It is recommended to focus on Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) , Yunnan Baiyao Group Co.Ltd(000538) , Chongqing Taiji Industry (Group) Co.Ltd(600129) , Zhejiang Shouxiangu Pharmaceutical Co.Ltd(603896) , China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) , Jianmin Pharmaceutical Group Co.Ltd(600976) , Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Mayinglong Pharmaceutical Group Co.Ltd(600993) , Tianjin Zhongxin Pharmaceutical Group Corporation Limited(600329) , Zhejiang Jolly Pharmaceutical Co.Ltd(300181) .
This week’s robust portfolio: Wuxi Apptec Co.Ltd(603259) (603259), Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) (300760), Jiangsu Hengrui Medicine Co.Ltd(600276) (600276), Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) (600436), Topchoice Medical Co.Inc(600763) (600763).
Elastic combination this week: Chongqing Taiji Industry (Group) Co.Ltd(600129) (600129), Maider Medical Industry Equipment Co.Ltd(688310) (688310), Truking Technology Limited(300358) (300358), Shanghai General Healthy Information And Technology Co.Ltd(605186) (605186), Haisco Pharmaceutical Group Co.Ltd(002653) (002653).
Combination of this week’s scientific innovation board: Baiji Shenzhou (688235), Cansino Biologics Inc(688185) (688185), Suzhou Zelgen Biopharmaceuticals Co.Ltd(688266) – U (688266), Chengdu Olymvax Biopharmaceuticals Inc(688319) (68831), Aohua endoscopy (688212).
This week’s Hong Kong stock portfolio: Yaoming Biology (2269), Shanghai Junshi Biosciences Co.Ltd(688180) (1877), haijiya (6078), minimally invasive Siasun Robot&Automation Co.Ltd(300024) (2252), Jinxin reproduction (1951).
Risk warning: drug price reduction risk; The implementation progress of medical reform policy is lower than the expected risk; Risk of R & D failure.
