Zhou viewpoint: the government work report talks about medicine: research and development of specific drugs, centralized procurement and supply guarantee and medical insurance subsidies. On March 5, the fifth session of the 13th National People’s Congress opened. Premier Li Keqiang made a 2022 government work report to the Congress on behalf of the State Council. The key work related to medicine, medical insurance and medical treatment is as follows.
Medicine: after continuing to do a good job in vaccination, covid-19 specific drug research and development has been put in an important position; Epidemic prevention and control emphasizes precise prevention and control to maintain a balance between prevention and control and living order. In terms of encouraging innovation, we will further expand the scope of enterprises applicable to 100% pre tax deduction of R & D expenses.
Medical insurance: financial subsidies continue to increase: the per capita financial subsidies for residents’ medical insurance have increased by 30 yuan for three consecutive years (90 yuan for three years), and the per capita health service funds have increased by 5 yuan for two consecutive years (10 yuan for two years). Centralized purchase weakens price expression and emphasizes drug supply guarantee.
Medical treatment: promote the reform of public hospitals and support the social medical policy unchanged; Health China continues to put prevention first and proposes to strengthen the guarantee of drug use for rare diseases; We will continue to emphasize graded diagnosis and treatment, and there will be no change in the construction of national and provincial regional medical centers and the improvement of grass-roots health service capacity.
Others: the three child policy has added a special deduction of personal income tax for children under the age of 3 to reduce the burden in the parenting link.
This year, focus on covid-19 specific drug industry chain ( Shanghai Junshi Biosciences Co.Ltd(688180) , Xinxiang Tuoxin Pharmaceutical Co.Ltd(301089) , Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Porton Pharma Solutions Ltd(300363) , Wuxi Apptec Co.Ltd(603259) ) and auxiliary reproduction industry chain (Lizhu medicine, Changchun High And New Technology Industries (Group) Inc(000661) , Zhejiang Xianju Pharmaceutical Co.Ltd(002332) , Jinxin reproduction).
Market review: this week, the biomedical sector showed a slight upward trend, up 0.18%, ranking 10th in all SW primary industries. Since this year, the pharmaceutical and biological industry has fallen by 11.62%, 2.63 percentage points lower than the CSI 300 index, ranking 25th in all SW primary industries. In terms of subdivided industries, the pharmaceutical and biological subdivided sectors rose and fell this week, with chemical raw materials rising by 5.47% and medical services falling the most, down 1.83%. Since the beginning of this year, the performance of chemical APIs has been the best, down 0.63% year to date; Medical services was the weakest performing sub industry, down 16.73%. Traditional Chinese medicine (- 11.97%), biological products (- 12.87%) and medical services (- 16.72%) underperformed the pharmaceutical and biological (SW) industry index.
In terms of performance of individual stocks, the top five stocks that rose last week were: Jimin Pharmaceutical (38.51%), Huadong Medicine Co.Ltd(000963) (15.80%), Haisco Pharmaceutical Group Co.Ltd(002653) (14.08%), Tonghua Golden-Horse Pharmaceutical Industey Co.Ltd(000766) (13.19%) and Beijing Leadman Biochemistry Co.Ltd(300289) (13.09%). The top five stocks with declines are: Micro-Tech (Nanjing) Co.Ltd(688029) (- 14.92%), Aier Eye Hospital Group Co.Ltd(300015) (- 13.12%), Zhejiang Wolwo Bio-Pharmaceutical Co.Ltd(300357) (- 11.87%), Autek China Inc(300595) (- 10.52%) and Topchoice Medical Co.Inc(600763) (- 10.43%).
Valuation: the valuation remained basically stable this week. As of Friday (March 4), PE (TTM) and Pb (LF) of the whole pharmaceutical and biological (SW) industry were 31.3 times and 3.82 times respectively.
Risk warning: medical policy risk; Lower prices than expected; Systemic risk.
