Market review and Industry Valuation
Pharmaceutical biology rose 3.16%, outperforming the CSI 300 index by 2.77 percentage points and ranking 10th among the 31 Shenwan sub banks. Most of the pharmaceutical sub sectors rose, and offline pharmacies rose the most, up 11.09%. As of December 31, 2021, the PE (TTM) of Shenwan pharmaceutical industry is 35.06 times, and the latest premium rate relative to Shanghai and Shenzhen 300 is 150%. The valuation of TCM hospitals in the sub sector is the highest, 92.12 times, and the valuation of medical consumables is the lowest, 13.98 times.
Industry highlights
National drug safety and promotion of high quality development plan in the 14th five year plan
Guidance on medical insurance supporting the inheritance, innovation and development of traditional Chinese medicine printed and distributed
The 14th five year plan for the development of medical equipment industry was issued
Progress of New Coronavirus pneumonia
As of January 3, 2022, there are 102841 confirmed cases in China (excluding Hong Kong, Macao and Taiwan), 3256 confirmed cases, 4636 dead cases, 94949 cured and discharged cases, and 11326 confirmed cases imported from abroad. In terms of covid-19 vaccination, as of January 2, 2022, China had received 2.848 billion doses of covid-19 virus vaccine.
As of January 3, 2021, 293 million cases have been confirmed in the world. The country with the largest number of confirmed cases is the United States, with a total of 57.08 million, followed by India and Brazil, with 34.92 million and 22.31 million confirmed respectively. In terms of covid-19 vaccination, as of January 2, 2021, 92.13 doses of covid-19 vaccine had been vaccinated worldwide, and the vaccination proportion (number of complete vaccinations / total population) was 49.30%.
Core view
With the strong promotion of national policies, the status of traditional Chinese medicine has been raised to an unprecedented level. It is expected that the performance of the sector may be further improved with the continuous improvement of the industry pattern, the good epidemic prevention and control in China, and the downstream price increase driven by the rising price of traditional Chinese medicine. At present, the valuation of traditional Chinese medicine is reasonable: (1) under the reform of the review and approval system of traditional Chinese medicine, the approval of innovative traditional Chinese medicine is accelerated. 2021 is the most listed year in recent years. It is suggested to pay attention to the listed companies of high-quality innovative traditional Chinese medicine with strong comprehensive strength Tasly Pharmaceutical Group Co.Ltd(600535) ; (2) Some time-honored and OTC brand products have consumption attributes and avoid the medical insurance fee control policy. It is recommended to pay attention to Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) , China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) , etc.
The overall development trend of the industry is improving, and innovation is the eternal theme. On the one hand, the normalization of volume procurement continues to accelerate industry differentiation, forcing enterprises to transform to innovation; On the other hand, the medical insurance catalogue was dynamically adjusted to continuously accelerate the volume of innovative drugs. Driven by policies, talents and capital, China’s innovative drugs have entered the harvest period of achievements and opened the road of Internationalization: (1) at present, China’s innovative drug R & D is more homogeneous, with more concentrated targets and indications. The industry has gradually transformed and upgraded from me too / me worth to higher quality and more innovative me better and first in class, with strong R & D strength and rich pipelines, The advantages of domestic innovation leading enterprises with reasonable gradient and outstanding product differentiation advantages will be further highlighted. It is suggested to pay attention to Jiangsu Hengrui Medicine Co.Ltd(600276) , Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) , etc; (2) With the progress of science and technology, new medical discoveries, new technologies and new fields are emerging, and biological emerging markets such as cell and gene therapy are developing rapidly. It is suggested to pay attention to industrial development trends, high-quality enterprises and upstream industrial chains, such as life science services; (3) Global and Chinese innovative drug R & D is booming, and China’s CXO industry is developing rapidly. It is expected that with the promotion of policies and the continuous improvement of technical level, the industry concentration is expected to further improve. It is recommended to pay attention to industry leaders and sub leaders, such as Wuxi Apptec Co.Ltd(603259) , Porton Pharma Solutions Ltd(300363) .
Risk statement
Industry policy risk, drug safety risk, R & D risk and market competition risk.
