Key investment points:
Market review:
Last week, the overall performance of A-Shares was weak. The Shanghai index fell 0.11%, the Shenzhen Component Index fell 2.93% and the gem index fell 3.75%. The primary sub industries such as coal, transportation, agriculture, forestry, animal husbandry and fishery increased significantly, while the industries such as automobile, electronics and power equipment led the decline. During the reporting period, the pharmaceutical and biological sector rose 0.18%, outperforming the CSI 300 index by 1.86% and the gem index by 3.93%. Among the various sectors in the pharmaceutical industry, the pharmaceutical business sector rebounded sharply, up 5.39%; The chemical pharmaceutical sector achieved an increase of 2.62%, ranking the second; The rest of the sectors showed varying degrees of decline, among which the pharmaceutical service sector had the largest decline, with a decline of 1.83%.
Industry highlights of the week:
1. On March 5, Premier Li Keqiang delivered the government work report on behalf of the State Council at the fourth session of the 13th National People's Congress;
2. On February 28, FDA officially approved the listing of the bcmacar-t therapy ciltacabtageneautoleucel of legendary biology / Johnson & Johnson.
Industry Week view:
The pharmaceutical sector fluctuated slightly this week, and the market of each sub sector was divided. The popular traditional Chinese medicine and pharmaceutical service sectors last week all fell to varying degrees this week. The two sessions were held to guide the medium and long-term key development areas of the medical and health industry, including graded diagnosis and treatment, volume procurement, rare disease guarantee and the development of traditional Chinese medicine.
Our overall view of the industry this week:
In the long run, the policy of controlling medical insurance fees as the core limits the large market of the whole industry. The tightening of the payment end means that there will only be a structural market in the whole sector at most; 1) CXO sector is the only one in medicine that is not affected by policies and has high prosperity. At present, the core problem of CXO sector is to kill valuation, and there is no significant change in fundamentals. The problem with the CXO sector is that there is a risk of valuation adjustment when the valuation is high to a certain extent, resulting in a large decline in the sector. The tightening of overseas monetary policy has a greater impact on the valuation of Hong Kong stock CXO. 2) Favorable policy + undervalued value makes the traditional Chinese medicine sector have performance growth momentum and valuation cost performance. The price reduction policy of traditional Chinese medicine is strong, and the sales pressure of traditional Chinese medicine is small. It is recommended to pay attention to the OTC segment of traditional Chinese medicine in the traditional Chinese medicine sector.
In the short term, we suggest to be cautious and wait-and-see. The CXO sector has not fallen to a particularly cost-effective position at present. At present, it can only be regarded as a reasonable valuation range. The traditional Chinese medicine sector pays more attention to policy implementation and performance certainty.
Risk factors:
Repeated risks in some areas of the epidemic in China, the risk of exceeding expectations in the implementation of policies such as cost control and volume procurement, and the risk of failure in the research and development and listing of innovative drugs.
