Key investment points:
Market review: this week, the Shenwan pharmaceutical and biological sector index rose 0.2%, outperforming the CSI 300 index by 1.9%. The pharmaceutical sector ranked 10th in the Shenwan industry classification. Driven by the theme of epidemic prevention and control, the API sector and the pharmaceutical commercial sector performed better, rising 5.5% and 5.4% respectively; The top five increases in medicine were Xinxiang Tuoxin Pharmaceutical Co.Ltd(301089) (+ 51.2%), dajiaweikang (+ 43.5%), China Meheco Group Co.Ltd(600056) (+ 37.8%), Shanghai Kaikai Industry Company Limited(600272) (+ 34.4%), Dali Pharmaceutical Co.Ltd(603963) (+ 33.5%).
Industry policies and trends: 1) the two sessions were held: the pharmaceutical sector focused on epidemic prevention and control, centralized procurement of drugs and equipment, protection of rare diseases, and revitalization of traditional Chinese medicine; 2) Continued bid of Guocai (Yangtze River Delta): the lowest price is reduced by another 30% on average, and the continued bid of injections is significantly reduced: the prices of some products in the continued bid are set a new low, with an average decrease of 30% and a maximum decrease of 97%. 3) Guangdong Alliance: 87 new drugs were collected, and more than 60% of antibiotics were used. The focus was on the two fields of chronic diseases and common diseases, and 87 drugs of 42 varieties were selected. 4) Legendary biology: the US market application (BLA) of sidakiolensa was approved by FDA: China’s first cell therapy product was approved by FDA.
General consumption topic: there are many kinds of general consumption products, with large technical differences, complex production processes and technical barriers. Three logics support the medium and long-term development of the general consumption industry, and the growth ceiling of the industry is opened: 1) the product structure is upgraded, and the added value of general consumption will be gradually increased; 2) The industrial transfer to China has accelerated, and the OEM / ODM orders of enterprises have increased rapidly; 3) Centralized purchase promotes the improvement of concentration. It is suggested to pay attention to Shanghai Kindly Enterprises Development Group Co.Ltd(603987) , Zhejiang Gongdong Medical Technology Co.Ltd(605369) , etc.
Investment strategy: the national “two sessions” are being held. There is a strong voice to support the revitalization and development of traditional Chinese medicine and promote the comprehensive reform of traditional Chinese medicine. The reform and development of traditional Chinese medicine is expected to speed up again, and the traditional Chinese medicine sector will continue to become a hot spot for investment. Covid-19 epidemic occurred in many places in China, and the epidemic in Hong Kong continued to worsen. During the emergency construction of shelter hospital, Omicron put great pressure on China’s epidemic “dynamic clearing” prevention and control policy. The epidemic prevention and control related sectors are still the current hot investment fields of medicine. We believe that: focusing on traditional Chinese medicine and covid-19 epidemic prevention and control is the main investment strategy of current medicine: 1) Pfizer’s small molecule covid-19 drug industry chain deserves continuous attention: Pfizer is expected to announce paxlovid’s MPP application results in the near future, and it is expected that many Chinese pharmaceutical enterprises will obtain MPP patent authorization for production in the global non-standard market, and pay attention to Zhe Jiang Hua Hai Pharmaceuticalco.Ltd(600521) Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) etc; 2) “Integration of Chinese and Western medicine” is bound to become the main way of covid-19 treatment in China: the epidemic situation in Hong Kong continues to worsen, and Lianhua Qingwen capsule for prevention and treatment is difficult to find. Hundreds of thousands of boxes of Lianhua Qingwen capsule and Xuanfei Baidu granules are also being donated to Hong Kong urgently. The prevention and treatment of covid-19 with traditional Chinese medicine has formed a consensus in Chinese society, We are optimistic about the future of “three drugs and three parties” and build covid-19 prevention and control walls with small molecules and neutralizing antibodies, focusing on Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Shandong Buchang Pharmaceuticals Co.Ltd(603858) , Shanghai Junshi Biosciences Co.Ltd(688180) , etc; 3) CXO sector is expected to usher in a further rebound: CXO is still the segment with the highest bearing in the pharmaceutical sector. Under the strong demand for covid-19 small molecule intermediates and API, as well as the upcoming annual report and first quarter report period, the oversold rebound of the sector is expected to continue. Recommended focus: Wuxi Apptec Co.Ltd(603259) , Yaoming biology, Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Porton Pharma Solutions Ltd(300363) , Pharmaron Beijing Co.Ltd(300759) , etc; 4) Continue to be optimistic about the traditional Chinese medicine sector: the convening of the “two sessions” is expected to accelerate the implementation of favorable policies for traditional Chinese medicine, and the boom market is expected to run through 2022. We believe that traditional Chinese medicine will continue to be catalyzed by favorable policies, and all departments, especially the medical insurance bureau, will also issue separate documents to support it from the payment side. The support for traditional Chinese medicine will be gradually reflected in the growth rate of the company’s income and profit. Underestimation + strong policy support + underestimation + strong policy support is an important foundation for the continued upward trend of Chinese herbal medicine in the future, with a focus on innovation, brand OTC, formula particles, anti covid-19-19-19 Chinese medicine and other directions related to the direction of Chinese herbal medicine, brand OTC, brand OTC, formula particles, anti-19-19-19-19. Related labels: Hongda Xingye Co.Ltd(002002) Hongda Xingye Co.Ltd(002002) Poten Environment Group Co.Ltd(603603) Poten Environment Group Co.Ltd(603603) 603\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\wait.
Portfolio this week: it is recommended to focus on Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Chongqing Taiji Industry (Group) Co.Ltd(600129) , Shandong Buchang Pharmaceuticals Co.Ltd(603858) , Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) , Porton Pharma Solutions Ltd(300363) , Wuxi Apptec Co.Ltd(603259) and Shanghai Junshi Biosciences Co.Ltd(688180) .
March portfolio: it is recommended to focus on Wuxi Apptec Co.Ltd(603259) , Chongqing Taiji Industry (Group) Co.Ltd(600129) , Tofflon Science And Technology Group Co.Ltd(300171) , Hunan Jiudian Pharmaceutical Co.Ltd(300705) , Shanghai Kindly Enterprises Development Group Co.Ltd(603987) and Chongqing Zhifei Biological Products Co.Ltd(300122) .
Risk tip: the industry demand is less than expected; The performance of listed companies is less than expected; Market competition intensifies risks.
