On January 26, we reported "focus on 2022 potential" black swan ": a new round of Chinese epidemic, how should the portfolio deal with it?" It is mentioned that China may face a more severe epidemic prevention and control situation than when delta spread in the second half of 2021. In order to cope with the epidemic, the largest "black swan" this year, some positions should be allocated to the above epidemic prevention and control direction in the combination, so as to "both attack and defense". At present, according to our previous prediction, we still believe that the epidemic situation or the potential risk that needs the most attention this year, China's epidemic prevention and control may still be difficult to relax in the short term.
I. The first expectation is poor: has the market fully responded to the negative factors of the epidemic?
We believe that this round of epidemic has just begun and has not yet reached a climax. Since January this year, we have always stressed that, unlike the global epidemic that has passed the worst time point for the implementation of mass immunization, with the infection of Omicron more than 10 times that of delta and the limit of China's prevention and control system, the epidemic in China this year will exceed expectations. Recently, with the outbreak of Omicron mutant, the epidemic situation in China is characterized by many points, wide range and frequent occurrence. In the past week (3 / 6-3 / 12), 4598 new confirmed cases (excluding Hong Kong, Macao and Taiwan) were found in the mainland, up 5.5 times from late February (2 / 14-2 / 20), mainly concentrated in Jilin, Shandong, Guangdong, Shanghai and other places. On March 12, 1807 + 1315 confirmed + asymptomatic cases were added in Japan alone, involving 20 provinces (autonomous regions and municipalities directly under the central government), significantly exceeding the previous peak number of confirmed cases of beta and delta strains.
Second, the second expectation is poor: will the epidemic prevention policy be relaxed?
We believe that the "dynamic clearing" policy will not be abandoned. The "dynamic clearing" policy adopted by China essentially depends on the game between the ability of epidemic prevention and control and the ability of virus transmission.
1. China's epidemic prevention and control adheres to the general policy of "dynamic clearing" and will not waver or relax. At the teleconference of the joint prevention and control mechanism of the State Council on March 12, it was stressed that we should adhere to the general strategy of "external defense input and internal defense rebound" and the general policy of "dynamic zeroing", unswervingly and unrelentingly, take decisive measures to control the local epidemic situation as soon as possible and consolidate the achievements of epidemic prevention and control. Considering that China has a high aging rate, its per capita medical resources are lower than those in developed countries, and the vaccination rate of 38.4% in China is relatively low (as of February 25), once the epidemic control is liberalized, it may lead to a run on medical resources for the elderly and social panic.
2. The transmission speed of covid-19 mutant strain Omicron is "higher than expected" and the pressure of "external defense input" is still high. According to a study by CNBC and Hong Kong, the infectivity of delta strain is 60% higher than that of alpha strain, and the self replication speed of Omicron in the air is 70 times faster than that of delta variant. In the past week, the number of newly diagnosed people in the world rebounded, many countries adopted reopening measures, the global flow of people increased, and the external defense input is still facing challenges.
3. We believe that more stringent prevention and control measures may be taken in the future. We can pay attention to the investment opportunities of specific drugs, antigen detection, vaccines, respirators and other racing tracks related to the epidemic under the catalysis of demand. Inactivated vaccine has a certain protective rate against symptoms and death. For key protected populations, stronger immune protection can be obtained through booster injection, especially mRNA vaccine booster injection.
III. what is the impact on the overall economy?
In the short term, under the repeated epidemic, the recovery of consumption tends to weaken. Assuming that stronger epidemic prevention and control measures are taken in the future, the role of exports in driving the economy may also be weakened this year. However, in the medium term, it may guide the policy to increase support for steady growth. At that time, the market may reverse the trend. The new credit and social finance data in February were lower than expected, reflecting the weak financing demand of entities. Recently, the attitude of "steady growth" is obvious. We are concerned about whether the central bank will cut interest rates or introduce other loose policies and measures on the 15th of this month.
IV. what investment opportunities should we pay attention to?
China's epidemic has spread in many places, and the superposition of geographical conflicts has triggered shocks in the global capital market. The market's risk aversion has heated up sharply. The investment opportunities of undervalued blue chips are still the most stable main line in the market. In terms of specific configuration, in medical and epidemic prevention articles, attention should be paid to two main lines: detection and oral drugs; Repeated outbreaks, focus on vaccine investment opportunities:
1) detection: with the release of covid-19 antigen detection application scheme, the demand for covid-19 antigen detection products is expected to usher in explosive growth, focusing on IVD detection targets, as well as the upstream of relevant reagents and consumables; In addition, considering the increased demand for self inspection, retail pharmacies are expected to continue to benefit.
2) oral drugs: the United States has two small molecule oral drugs: EUA Pfizer (paxlovid) and molnupiravir; Chinese real biological azvudine is in phase III clinic, and a variety of small molecule drugs in early clinical stage are under research, Shanghai Junshi Biosciences Co.Ltd(688180) vv116 has been approved overseas, and Frontier Biotechnologies Inc(688221) American phase I clinic is in progress.
Focus on Chinese R & D and innovation enterprises with advanced progress, cdmo industrial chain of new drugs created by large overseas pharmaceutical enterprises and generic pharmaceutical industrial chain.
3) vaccine: the epidemic situation is repeated, and the immunization is strengthened in sequence. It is suggested to pay attention to the investment opportunities in the vaccine sector.
Recently, sporadic outbreaks have occurred in many places in China, and vaccines are still an important means of epidemic prevention and control. In addition, the National Health Commission has begun to deploy sequential immunization. Considering that the influenza trend of covid-19 epidemic is becoming more and more obvious, it is suggested to pay attention to covid-19 vaccine related development enterprises.
Risk warning: the epidemic prevention and control is less than expected, the virus variation and transmission capacity are more than expected, and the representation of historical data is limited.
