Comply with medical reform and select growth. In 2021, the pharmaceutical and biological sector showed a trend of increasing first and then decreasing, and the market performance in the whole year was poor. Looking forward to 2022, Considering: (1) after early adjustment, the overall valuation of the pharmaceutical and biological sector fell to a low level, the fund position fell to a low level, and the allocation cost performance gradually appeared; (2) The centralized drug purchase and medical insurance negotiations are normalized, the mechanism design is more mature, the price decline tends to be relatively moderate, key reform policies and action plans such as DRG payment and medical service price have been promulgated one after another, the industrial policies are more clear, and the disturbance from the policies is expected to be reduced; (3) Aging, innovation, internationalization and localization continue to promote the steady development of the industry, and the industry fundamentals are still good; we maintain the “leading market” of the pharmaceutical and biological sector grade. Policy immunity and high growth have always been important considerations in pharmaceutical and biological investment. We believe that the investment strategy in 2022 is to comply with the trend of pharmaceutical policy reform, focus on high growth track and select high-quality stocks. Specifically, we are optimistic about the following investment directions:
Innovative medicine and its industrial chain: innovation is the main line that remains unchanged for a long time. With the joint efforts of policy support, capital assistance and pharmaceutical enterprise innovation, the number of listing applications and external licensing of innovative drugs in China have increased significantly, and the achievements of innovation and internationalization have initially appeared, which is expected to usher in the harvest period. It is suggested to pay attention to the rich product pipeline, strong differentiated innovation ability Innovative pharmaceutical enterprises with strong internationalization ability Jiangsu Hengrui Medicine Co.Ltd(600276) (600276. SH), Betta Pharmaceuticals Co.Ltd(300558) (300558. SZ), Shanghai Junshi Biosciences Co.Ltd(688180) (688180. SH); from the perspectives of pharmaceutical financing in the primary market, enterprise R & D investment, outsourcing penetration, and enterprise orders on hand, the CXO industry is still in high momentum. It is recommended to pay attention to CXO leaders Wuxi Apptec Co.Ltd(603259) (603259. SH), Pharmaron Beijing Co.Ltd(300759) (300759. SZ), Hangzhou Tigermed Consulting Co.Ltd(300347) (300347. SZ) Asymchem Laboratories (Tianjin) Co.Ltd(002821) （002821.SZ）、 Porton Pharma Solutions Ltd(300363) （300363.SZ）。
Medical services: under the background of aging population and rising income level of residents, China’s high-end medical service resources will still face the contradiction of insufficient supply. It is suggested to pay attention to the medical service enterprises that are misaligned with public hospitals, benefit from consumption stratification and upgrading, have strong policy immunity and obvious brand advantages, For example, Aier Eye Hospital Group Co.Ltd(300015) (300015. SZ), Topchoice Medical Co.Inc(600763) (600763. SH), Xi’An International Medical Investment Company Limited(000516) (000516. SZ); it is suggested to pay attention to the ICL leader Guangzhou Kingmed Diagnostics Group Co.Ltd(603882) (603882. SH), which helps hospitals reduce costs and increase efficiency and complies with the trend of medical insurance fee control policy, as well as the retail drugstore leaders Yifeng Pharmacy Chain Co.Ltd(603939) (603939. SH), Lbx Pharmacy Chain Joint Stock Company(603883) (603883. SH), who have improved performance expectations in 2022, benefited from the increase of industry concentration and the outflow of prescriptions Yixintang Pharmaceutical Group Co.Ltd(002727) (002727. SZ), etc.
Risk warning: the price decline of consumables and drugs exceeds the expected risk; Failure risk of innovative drug research and development; Industry policy risk; Risk of intensified industry competition; Covid-19 epidemic recurrence risk, etc.
