Key investment points:
Current market review
In the current period (3.5 – 3.12), the Shanghai Composite Index closed at 330975, down 4.00%; The CSI 300 index closed at 430652, down 4.22%; SME 100 closed at 848451, down 4.64%; In the current period, Shenwan pharmaceutical and biological industry index closed at 985438, down 2.07%, ranking fourth among Shenwan’s 31 primary industry indexes. The seven secondary sectors outperformed the Shanghai Composite Index, CSI 300 and SME 100.
Important information
Results of centralized purchase of consumables in 17 provinces and regions
On March 9, Beijing Pharmaceutical centralized procurement service center, Tianjin pharmaceutical procurement center and Hebei medical equipment centralized procurement center issued the notice on publishing the results of joint procurement of orthopedic trauma medical consumables of Beijing Tianjin Hebei “3 + n” alliance.
The highest decline is 99.81%! The first batch of results of centralized mining of 276 large varieties were announced
On March 10, the first batch of drugs such as diclofenac purchased by Guangdong alliance were quoted online and the winning results were announced. According to statistics, the decline of some varieties is amazing, among which the average decline of citicoline sodium injection and piracetam injection is more than 98%.
The National Health Commission announced that covid-19 antigen reagent was released
In March 11th, the national Wei Jian administration official website announced that after the study, the State Council responded to the joint prevention and control mechanism of New Coronavirus pneumonia, and decided to add antigen detection on the basis of nucleic acid detection, and formulated the “COVID-19 virus antigen detection application plan (Trial Implementation)”.
CDE solicited opinions on the guiding principles for clinical research and development of new drugs of traditional Chinese medicine compound preparations based on human experience
On March 11, the drug evaluation center of the State Food and Drug Administration issued a notice to solicit opinions on the guiding principles for clinical research and development of new drugs of traditional Chinese medicine compound preparations based on human experience (Draft for comments). The guiding principle focuses on the collection of human experience and how to generate evidence to support regulatory decisions based on human experience.
Core view
In the current period, Shenwan pharmaceutical and biological industry index closed at 985438, down 2.07%, ranking fourth among Shenwan’s 31 primary industry indexes. The seven secondary sectors outperformed the Shanghai Composite Index, CSI 300 and SME 100.
In terms of epidemic situation, the peak of global epidemic outbreak tends to ease. At present, the number of new cases per day is still about 1.5 million. Since this week, the epidemic situation in China has shown a trend of sporadic and high incidence, and local cases have been reported in many places. In terms of covid-19 vaccination, covid-19 vaccination has made steady progress. According to the data of China’s National Health Commission, China had received covid-19 virus vaccine for a total of 3.180 billion doses as of March 10.
In terms of news, on March 11, the drug evaluation center of the State Food and Drug Administration issued a notice to solicit opinions on the guiding principles for clinical research and development of new drugs of traditional Chinese medicine compound preparations based on human experience (Exposure Draft). The guiding principles (Exposure Draft) fully consider the characteristics of traditional Chinese medicine, take into account the human experience that plays an important role in traditional Chinese medicine treatment, and are more flexible and standardized in policy, which is good for traditional Chinese medicine enterprises to develop new traditional Chinese medicine compound drugs with real clinical value.
In March 11th, the national Wei Jian administration official website announced that after the study, the State Council responded to the joint prevention and control mechanism of New Coronavirus pneumonia, and decided to add antigen detection on the basis of nucleic acid detection, and formulated the “COVID-19 virus antigen detection application plan (Trial Implementation)”. As of March 11, according to the covid-19 test reagents approved by nmpa in China, a total of 73 products have been approved for marketing, including 38 nucleic acid covid-19 test products, 31 antibody covid-19 test products and 4 antigen covid-19 test products. Compared with the US FDA, and EU CE certification, Chinese enterprises have 22 covid-19 testing products approved for use in the EU, including 10 nucleic acid covid-19 testing products, 9 antibody covid-19 testing products and 3 antigen covid-19 testing products; At present, 502 covid-19 testing products of Chinese enterprises have obtained CE certification in the EU, including 82 nucleic acid covid-19 testing products, 172 antibody covid-19 testing products and 250 antigen covid-19 testing products. Previously, antigen detection was widely used in European and American countries, while nucleic acid detection has been used as covid-19 virus detection method in China. Compared with nucleic acid detection, antigen detection does not need special equipment and instruments, so it has the advantages of high efficiency, convenience and intuitive result judgment. When the transmission speed of Omicron mutant is accelerated, the release of antigen detection will help to realize the early detection of cases, improve the detection efficiency of covid-19, and create better basic conditions and greater space for the change of covid-19 prevention and control policies in the future. We believe that the release of antigen detection not only has a direct positive effect on the relevant subjects engaged in covid-19 virus detection, but also puts forward a signal of higher requirements for epidemic prevention on the premise of ensuring stable economic growth.
The market trend has verified the investment view of our annual strategy report at the beginning of 2022. Covid-19 industrial chain is an important part of the total medical demand. According to the differences of consumption characteristics, the investment opportunities of covid-19 testing and treatment are better than those of protection and vaccine, including manufacturing and channel terminals: 1) covid-19 testing industrial chain is recommended to focus on Zhejiang Orient Gene Biotech Co.Ltd(688298) Guangzhou Wondfo Biotech Co.Ltd(300482) , Bgi Genomics Co.Ltd(300676) , Lepu Medical Technology (Beijing) Co.Ltd(300003) and Jiangsu Yuyue Medical Equipment And Supply Co.Ltd(002223) and other drugstore terminals, as well as Yifeng Pharmacy Chain Co.Ltd(603939) , Lbx Pharmacy Chain Joint Stock Company(603883) and other drugstore terminals; 2) Covid-19 oral drug industry chain suggests to continue to focus on Shanghai Junshi Biosciences Co.Ltd(688180) -u, Porton Pharma Solutions Ltd(300363) , Asymchem Laboratories (Tianjin) Co.Ltd(002821) and Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) and so on.
On the whole, we believe that the focus of market repair may continue to focus on sectors with marginal improvement and valuation repair logic. The trend of API sector has verified our latest view. At the time point when valuation switching is gradually approaching, advance layout needs to pay special attention to marginal improvement and sustainability of growth. From the perspective of valuation, the pharmaceutical industry is currently at a historical low valuation. The market has been worried that the suppression of the price segment by centralized purchase and medical insurance negotiation will change the growth attribute of the pharmaceutical industry. We believe that the logic of long-term stable growth of the pharmaceutical industry remains unchanged under the condition of demand determination and improvement of payment end capacity.
In the long run, with the continuous promotion of the procurement of drugs and consumables, enterprises with high safety margin, strong innovation ability, rich product pipelines and good competition pattern are expected to continue to benefit in the long cycle. It is suggested to continue to focus on innovative drugs and innovative drug industry chain, high-end medical devices, medical consumption terminals and medical consumption layout with scarcity and consumption attributes, At the same time, tap the second-line blue chips with relatively low valuation:
1) innovative drugs and the industry chain of innovative drugs and innovative drugs, including synthetic and specialist innovative drug enterprises, CXO industry, and the industrial chain of innovative drugs, including comprehensive and specialist innovative drug enterprises, and CXO industry. It is suggested to focus on ‘ Jiangsu Hengrui Medicine Co.Ltd(600276) ‘ \ and Apeloa Pharmaceutical Co.Ltd(000739) etc;
2) it is recommended to pay attention to Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) and Lepu Medical Technology (Beijing) Co.Ltd(300003) as the leader of high-end medical devices with outstanding import substitution ability;
3) for medical consumption terminals benefiting from increased market concentration, it is recommended to pay attention to Yixintang Pharmaceutical Group Co.Ltd(002727) , Yifeng Pharmacy Chain Co.Ltd(603939) and Dian Diagnostics Group Co.Ltd(300244) etc;
4) biological products enterprises with scarcity and consumption attributes, including Chongqing Zhifei Biological Products Co.Ltd(300122) , Changchun High And New Technology Industries (Group) Inc(000661) , Hualan Biological Engineering Inc(002007) , Cansino Biologics Inc(688185) -u and Pacific Shuanglin Bio-Pharmacy Co.Ltd(000403) .
Risk tips: covid-19 epidemic fluctuation risk and market adjustment risk
