Key investment points:
Market review: this week, the Shenwan pharmaceutical and biological sector index fell by 2.1%, outperforming the CSI 300 index by 2.2%. The pharmaceutical sector ranked fourth in the Shenwan industry classification. Driven by the theme of epidemic prevention and control, the API sector performed better, rising by 2.1%; The top five increases in medicine were Changjiangrunfa Health Industry Co.Ltd(002435) (+ 61.1%), Ningbo Menovo Pharmaceutical Co.Ltd(603538) (+ 46.6%), China Meheco Group Co.Ltd(600056) (+ 41.7%), Pku Healthcare Corp.Ltd(000788) (+ 34.8%), Guangzhou Wondfo Biotech Co.Ltd(300482) (+ 27.1%).
Industry policies and trends: 1) release of pilot scheme for antigen detection application: antigen detection is implemented to effectively supplement nucleic acid detection; 2) 276 Western medicines collected by the alliance of 11 provinces in Guangdong: (the first batch) among the results of the proposed selection, the highest decline was 99.81%, 142 medicines decreased by 80% – 90%, and the decline of growth hormone powder injection was mild; 3) Wuxi Apptec Co.Ltd(603259) : from January to February 2022, the year-on-year growth rate of orders on hand and sales revenue exceeded 65%, and the year-on-year growth rate of annual revenue is expected to reach 65-70%. 4) China Meheco Group Co.Ltd(600056) : win the commercial operation right of Pfizer covid-19 in the Chinese market; 5) Baiji Shenzhou: seven indications were approved, and tirizumab firmly occupied the first echelon position of domestic PD-1 monoclonal antibody.
Special topic of antigen detection: the epidemic situation is multi-point and high incidence. China’s antigen detection strongly supplements nucleic acid and pays attention to the investment opportunities of antigen detection. China’s pilot scheme for antigen detection was released to supplement nucleic acid detection to improve the ability of “early detection”: 1) the advantage of time and cost is powerful to supplement nucleic acid detection; 2) In the “post mutation period”, the epidemic situation in China is multi-point and high, and the antigen detection may start a self-test scale of 100 billion; 3) China’s antigen detection products, especially family self inspection products, are expected to speed up the registration and approval. It is suggested to pay attention to Guangzhou Wondfo Biotech Co.Ltd(300482) , Zhejiang Orient Gene Biotech Co.Ltd(688298) , Hangzhou Biotest Biotech Co.Ltd(688767) , Asahi biology and OTC Jiangsu Yuyue Medical Equipment And Supply Co.Ltd(002223) and Cofoe Medical Technology Co.Ltd(301087) .
Investment strategy: covid-19 epidemic occurred in many places in China, and the epidemic in Hong Kong continued to worsen. Omicron put great pressure on China’s epidemic “dynamic clearing” prevention and control policy. China began to add antigen detection as a supplementary means on the basis of nucleic acid detection. Epidemic prevention and treatment related sectors are still the current hot investment fields of medicine. The national “two sessions” strongly 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 of investment. We believe that antigen detection, traditional Chinese medicine and covid-19 epidemic prevention and control are the main investment strategies of medicine at present:
1) China’s antigen testing has been launched on a trial basis, adding the key role of antigen self-test products in Hong Kong’s anti epidemic this time. China’s antigen testing products, especially family self-test products, are expected to be rapidly and in large quantities, and are optimistic about the three main investment lines of the antigen testing industry chain: ① it is recommended to pay attention to the listed companies Guangzhou Wondfo Biotech Co.Ltd(300482) , Bgi Genomics Co.Ltd(300676) Nanjing Vazyme Biotech Co.Ltd(688105) etc; ② We expect that the approval of Chinese antigen products will be accelerated one after another. We suggest paying attention to antigen reagent testing manufacturers that are exported to Europe and the United States in overseas epidemic situations, with leading sales volume, high overseas brand awareness and sufficient production capacity, and paying attention to representative enterprises Zhejiang Orient Gene Biotech Co.Ltd(688298) , Hangzhou Biotest Biotech Co.Ltd(688767) , Anxi biology, Hangzhou Alltest Biotech Co.Ltd(688606) , Andon Health Co.Ltd(002432) , etc; ③ For the self inspection population of the third category of antigen detection (community residents), it is suggested to give priority to Jiangsu Yuyue Medical Equipment And Supply Co.Ltd(002223) , Cofoe Medical Technology Co.Ltd(301087) etc. with OTC channel advantages and great potential competitive advantages in the future; At the same time, pay attention to the investment opportunities of pharmacies brought by the demand for OTC antigen detection.
2) Pfizer covid-19 small molecule pharmaceutical industry chain deserves continuous attention: Pfizer is expected to announce paxlovid’s MPP application results in the near future. It is expected that many Chinese pharmaceutical enterprises will obtain MPP patent authorization for production in the global non-standard market, focusing on Zhe Jiang Hua Hai Pharmaceuticalco.Ltd(600521) , Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) , etc; 3) “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; 4) 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; 5) 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 Guangzhou Wondfo Biotech Co.Ltd(300482) , Hangzhou Biotest Biotech Co.Ltd(688767) , Zhejiang Orient Gene Biotech Co.Ltd(688298) , Nanjing Vazyme Biotech Co.Ltd(688105) , Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Shanghai Junshi Biosciences Co.Ltd(688180) , etc.
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.
