Today (December 27), pharmaceutical stocks rose sharply, led by the pharmaceutical business sector. As of the close, Guangxi Liuzhou Pharmaceutical Co.Ltd(603368) , Dashenlin Pharmaceutical Group Co.Ltd(603233) rose by the limit. Lbx Pharmacy Chain Joint Stock Company(603883) , Yifeng Pharmacy Chain Co.Ltd(603939) increased by more than 8%, and NMN concept, traditional Chinese medicine, pharmaceutical e-commerce, generic consistency, chemical pharmacy and other sub sectors all increased by more than 3%. Among them, the concept of traditional Chinese medicine continued to be strong, Hunan Fangsheng Pharmaceutical Co.Ltd(603998) , Teyi Pharmaceutical Group Co.Ltd(002728) , Jinghua Pharmaceutical Group Co.Ltd(002349) , Kunming Longjin Pharmaceutical Co.Ltd(002750) , Lanzhou Foci Pharmaceutical Co.Ltd(002644) , Dali Pharmaceutical Co.Ltd(603963) rose by more than 18%, and Gansu Longshenrongfa Pharmaceutical Industry Co.Ltd(300534) rose by more than 12%.
the prosperity of the traditional Chinese medicine sector spread, and the market focused on undervalued pharmaceutical stocks
Since late December, the traditional Chinese medicine sector has continued to strengthen. As of today’s closing (December 27), the sector index has increased by nearly 16% in recent six days. In terms of individual stocks, according to the rise and fall in recent six days, Gansu Longshenrongfa Pharmaceutical Industry Co.Ltd(300534) has increased by nearly 115%, Kunming Longjin Pharmaceutical Co.Ltd(002750) has increased by nearly 51%, Tianjin Chase Sun Pharmaceutical Co.Ltd(300026) has increased by nearly 47%, Guiyang Xintian Pharmaceutical Co.Ltd(002873) , Chongqing Taiji Industry (Group) Co.Ltd(600129) , Jinghua Pharmaceutical Group Co.Ltd(002349) , Lanzhou Foci Pharmaceutical Co.Ltd(002644) has increased by more than 30%. Note: Traditional Chinese medicine stocks rose or fell in the past six days (closing on December 27)
The rise of the traditional Chinese medicine sector is mainly due to the expectation of the valuation and repair market, Zhongtai Securities Co.Ltd(600918) pointed out that the policy continues to actively encourage the development of traditional Chinese medicine. At the beginning of the year, the State Council issued several policies and measures on accelerating the characteristic development of traditional Chinese Medicine, which defined the state’s determination to encourage the development of traditional Chinese medicine at multiple levels and in multiple directions, Since this year, the acceleration of the approval and listing of new traditional Chinese medicine has also confirmed the strength of policy support. At present, traditional Chinese medicine enterprises are generally at a low historical valuation. The valuation of most companies corresponds to only 10-20 times PE in 22 years, with prominent configuration value.
Driven by the valuation and repair market of traditional Chinese medicine, the undervalued pharmaceutical sector such as pharmaceutical business also ushered in a rise. Zhongtai Securities Co.Ltd(600918) believes that under the influence of the 20-year high base, the performance of the pharmacy sector has been under pressure in 21 years, the repeated epidemic has also affected the operation of some stores, and the industry valuation has returned to the historically low level. The number of new stores opened by major listed pharmacies in the first three quarters of 21 years has exceeded 20 years. In the whole year, the new stores are expected to contribute profits from 22 years after a cultivation period of about one year. The weakening of the base effect and the release of new store profits, the upward trend of the performance inflection point of the leading chain drugstores is clear, and it is expected to usher in the valuation repair.
there may be scattered opportunities in the sector next year. Pay attention to the fundamental changes of high-quality stocks
Looking back on this year’s pharmaceutical sector, it showed an overall trend of developing first and then restraining. Until November, the sector index started to repair again. Guosheng Securities pointed out that the pumping effect of the hot plate, the chaos of pharmaceutical policy expectations caused excessive concern, the market environment exacerbated pessimism, and the pharmaceutical plate showed fluctuating development in the whole year under the “domestic and foreign troubles”. In essence, this year’s medicine is the digestion of previous overvaluation. Looking forward to the future, the population structure will jump into aging. Aging will lead to the expansion of just needed medicine, the upgrading of health consumption, the penetration of consumption medicine, and the long-term comparative advantage of the pharmaceutical industry.
In terms of investment strategy, Huaxi Securities Co.Ltd(002926) points out that the investment strategy of “choosing the right track and the leader of the industry” has achieved sustained excess returns in the past two to three years. However, with the cumulative increase of the rise in the past few years, the individual stocks of the golden track selected under the above strategy are also at a relatively high valuation. Although from the perspective of the development trend of the industry, they are still optimistic in the medium and long term, However, from the perspective of secondary market investment, the investment strategy of “buy track and buy leader” will make it more difficult to easily obtain excess returns.
Looking forward to next year, Huaxi Securities Co.Ltd(002926) believes that investment opportunities in the pharmaceutical sector will be relatively “scattered” next year. More investment opportunities come from the selection of “bottom-up” stocks. Mining stocks with “positive and significant changes in the basic mask and low valuation” will make it easier to obtain investment opportunities. in terms of track selection, in line with the development trend and policy trend of the pharmaceutical industry, we are optimistic about CXO, medical services, optional medical consumption sectors (medical beauty, vaccines, growth hormone, traditional Chinese medicine consumer goods), innovative drugs and medical devices . Specific benefit segments and targets:
CXO fields: Porton Pharma Solutions Ltd(300363) , Shanghai Medicilon Inc(688202) , Wuxi Apptec Co.Ltd(603259) , Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) , Joinn Laboratories (China) Co.Ltd(603127) , Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Pharmaron Beijing Co.Ltd(300759) , Jiangsu Sinopep-Allsino Biopharmaceutical Co.Ltd(688076) , and via biology ; Medical and aesthetic fields: Imeik Technology Development Co.Ltd(300896) , Huadong Medicine Co.Ltd(000963) ; Vaccine: Chongqing Zhifei Biological Products Co.Ltd(300122) , Changchun Bcht Biotechnology Co(688276) , Shenzhen Kangtai Biological Products Co.Ltd(300601) ; Growth hormone: Changchun High And New Technology Industries (Group) Inc(000661) ; Export of innovative drugs and preparations: Jiangsu Hengrui Medicine Co.Ltd(600276) , Xiansheng pharmaceutical, Haisco Pharmaceutical Group Co.Ltd(002653) ; Medical device field: Well Lead Medical Co.Ltd(603309) , Shanghai Kindly Enterprises Development Group Co.Ltd(603987) .
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(Financial Associated Press)
