Current market review
Current period (12.20 – 12.24) the Shanghai Composite Index closed at 3618.05, down 0.39%; the Shanghai and Shenzhen 300 index closed at 4921.34, down 0.67%; the small and medium 100 index closed at 9810.99, up 0.04%; the current Shenwan pharmaceutical and biological industry index closed at 11036.16, up 0.53%, ranking 10th among the 28 primary industry indexes of Shenwan. Among the seven secondary sectors, chemical APIs, chemical preparations, traditional Chinese medicine and pharmaceutical business And medical devices outperformed the Shanghai Composite Index, CSI 300 and small and medium-sized 100.
Important information
On December 22, U.S. Food and Drug Administration (FDA) urgently approved Pfizer's oral covid-19 drug for high-risk groups over the age of 12, making it the first approved oral covid-19 drug in the United States. NBC reported that this drug is used to treat mild to moderate covid-19 pneumonia. The applicable population is high-risk patients over the age of 12 and weighing more than 40kg. Patients can take this drug at home. However, F Da said that the drug can only be obtained through prescription and should be taken as soon as possible within 5 days after the patient has symptoms, so as to prevent the condition from deteriorating into severe illness. The oral drug produced by Pfizer consists of two antiviral drugs, the FDA said in a statement. The oral medicine contains 30 tablets in a complete course of treatment. The patient must take 3 tablets twice a day for 5 days. At present, Pfizer has not announced the pricing of paxlovid, but it has announced that drugs provided to low-income countries will not charge royalties, which will significantly reduce drug prices. For the price and production plan, the reporter of Beijing business daily contacted Pfizer, but no reply has been received as of press time. However, according to previous disclosure, the purchase price of the U.S. government is $530 per treatment course.
On December 21, the results of the proposed centralized procurement and selection of inter provincial alliance of Chinese patent medicine were issued. On the whole, the price reduction of each product group was within the market expectation. Previously, in November 2021, China's first batch of inter provincial alliance of Chinese patent medicines was officially opened. Hubei pharmaceutical price and bidding procurement management service network issued the centralized volume procurement document of Chinese patent medicine Alliance (zcylm-2021-1) on November 19 , a Chinese patent medicine alliance composed of 19 provinces of Hubei, Hebei, Shanxi, Inner Mongolia, Liaoning, Fujian, Jiangxi, Henan, Hunan, Qiong, Chongqing, Sichuan, Guizhou, Tibet, Shaanxi, Gansu and Ningxia new Xinjiang corps. The average decline of Chinese patent medicine this time was about 46.55%, and the highest decline was the ginkgo leaf of Sichuan Senke Pharmaceutical Co., Ltd., with the price falling by 82.63%.
Core view
The pharmaceutical and biological industry index rose 0.53% in the current period, ranking 10th among the 28 primary industry sectors of Shenwan. Among the seven secondary sectors, chemical raw materials, chemical preparations, traditional Chinese medicine, pharmaceutical commerce and medical devices outperformed the Shanghai Composite Index, CSI 300 and small and medium-sized 100.
In terms of epidemic situation, the emergence of new mutant strains and immune escape have added more uncertainty to overseas epidemic situations. Omicron mutant strains account for 73% of newly confirmed cases in the United States, and there are many locally confirmed cases in Xi'an, China. In terms of covid-19 vaccination, the enhanced vaccination of covid-19 vaccine has made steady progress. According to the data of China National Health Commission, as of December 24, China had received a total of 2.733 billion doses of covid-19 virus vaccine. In terms of news, Pfizer and MSD covid-19 oral drugs were approved to be listed in the United States on December 22 and December 23 respectively. Pfizer previously disclosed that the purchase price was $530 per treatment course.
We took the lead in exploring investment opportunities in the traditional Chinese medicine sector in the report of "Jing", "Shi" Zhiyuan, innovation and circulation - in-depth report on the traditional Chinese medicine industry "in August 2021, The pharmaceutical and biological industry weekly: China's first covid-19 neutralizing antibody treatment drug was approved, focusing on the marginal improvement and valuation repair plate under the mild recovery of the market The weekly report of pharmaceutical and biological industry: a new round of entity list in the United States triggered panic in the sector, and continued to pay attention to the recovery opportunities of the traditional Chinese medicine sector in the shock continuously prompted the investment opportunities of the traditional Chinese medicine sector. Since the beginning of December, 62 of the 71 companies in SW traditional Chinese medicine sector have increased, including 2 companies with an increase of 50%, accounting for 2.83%; There are 3 pharmaceutical and biological industries, accounting for 0.73%. Four companies increased by 30% - 50%, accounting for 5.63%; There are 7 pharmaceutical and biological industries, accounting for 1.71%. 36 companies increased by 10% - 30%, accounting for 50.70%; There are 63 pharmaceutical and biological industries, accounting for 15.40%. 19 companies increased by 0% - 10%, accounting for 26.76%; There are 127 pharmaceutical and biological industries, accounting for 31.05%.
On December 21, the results of the proposed selection of the inter provincial alliance of Chinese patent medicines were issued. The average decline of Chinese patent medicines was about 42%, and the highest decline was the ginkgo leaves of Sichuan Senke Pharmaceutical Co., Ltd., with a price drop of 82.63%. From the results of the current inter provincial alliance of Chinese patent medicines, this centralized purchase belongs to the regional pilot of the follow-up nationwide centralized purchase of Chinese patent medicines, and the price reduction range is generally lower than that of the previous national centralized purchase of chemical drugs, consumables and biological drugs, further catalyzing the rising market of the traditional Chinese medicine sector.
Since the first three quarters of 2021, the growth rates of operating revenue and net profit of traditional Chinese medicine sector have been 10.96% and 20.45% respectively. Although the growth rate decreased month on month in the third quarter, it still remained at a relatively high level year-on-year. According to the data since 2010, the parent net profit of the traditional Chinese medicine sector has declined since 2018, and the operating revenue has declined significantly since 2019. The changes in demand and medication structure are the internal reasons. The covid-19 epidemic since 2020 has accelerated the bottom of the traditional Chinese medicine sector. With the stabilization of epidemic prevention and control in China, the landing of centralized purchase and price reduction boots and the start of the price rise of traditional Chinese medicine, the bottom rebound of traditional Chinese medicine began to materialize in 2021. On the whole, the rise of the traditional Chinese medicine sector in this round comes from the valuation repair under the logic of marginal performance improvement. The price rise of traditional Chinese medicine industry chain products strengthens the expectation of performance improvement and the improvement of profitability. Meanwhile, compared with the previous rounds of centralized procurement, the average price reduction of the first centralized procurement products of the Chinese patent medicine alliance composed of 19 provinces was better than expected, catalyzing the plate market. Standing at the current time, the valuation level of the Chinese medicine plate is still reasonable, there is no bubble, and it can continue to rise. Traditional Chinese medicine has reconstructed its own value system in the fields of chronic disease, disease prevention, health care and convalescence. At the same time, traditional Chinese medicine products with outstanding clinical effects will continue to shine like innovative new drugs. It is suggested to continue to focus on the track of traditional Chinese medicine innovation and consumer goods, and focus on the price expectation under the logic of inflation, Listed companies with the attributes of "true innovation" and "strong consumption" determined by marginal improvement and valuation repair logic avoid subject stocks with high short-term growth. Specifically, they can focus on Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) , Beijing Tongrentang Co.Ltd(600085) , China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) , Tasly Pharmaceutical Group Co.Ltd(600535) , Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited(600332) , Jiuzhitang Co.Ltd(000989) and Henan Lingrui Pharmaceutical Co.Ltd(600285) .
Based on the judgment of short-term fluctuation and repeated uncertainty of covid-19 epidemic situation, we can continue to pay attention to the investment opportunities of covid-19 prevention and control industry chain in the short term, including covid-19 oral drugs, vaccines and antibodies, and the listed companies deeply involved in covid-19 prevention and control drug supply chain. In the long run, the pharmaceutical industry is currently at a historical low valuation. With the continuous promotion of the procurement of drugs and consumables, enterprises with relatively high safety margin, strong innovation ability, rich product pipelines and good competition pattern are expected to continue to benefit in the long cycle. It is suggested to continue to surround the innovative drug industry chain and high-end medical devices, At the same time, tap second-line blue chips with relatively low valuation.
1) Innovative drugs and innovative drug industry chain, including comprehensive and specialized innovative drug enterprises and CXO industry. It is recommended to pay attention to Jiangsu Hengrui Medicine Co.Ltd(600276) , Jiangsu Nhwa Pharmaceutical Co.Ltd(002262) , Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Wuxi Apptec Co.Ltd(603259) , Hangzhou Tigermed Consulting Co.Ltd(300347) , Pharmaron Beijing Co.Ltd(300759) and Apeloa Pharmaceutical Co.Ltd(000739) ;
2) It is recommended to pay attention to Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) and Jiangsu Yuyue Medical Equipment And Supply Co.Ltd(002223) as the leader of high-end medical devices with outstanding import substitution ability;
Risk tips: covid-19 epidemic fluctuation risk and market adjustment risk
