In this week’s weekly report, we discuss the investment logic of youningwei
The prosperity of life science is high, and the science service industry has great prospects
In 2019, the market scale will be 13.6 billion yuan, and the CAGR is expected to be 13.8% from 2019 to 2024, reaching 26 billion yuan in 2024. With the continuous growth of China’s basic scientific research funds (R & D investment CAGR in 2010-2019 is 13.30%) and the vigorous development of downstream application fields of life sciences such as biomedical enterprises (R & D investment CAGR in 2015-2019 is 21.9%), the science service industry is expected to obtain further development space.
The life science reagent industry is characterized by a wide variety of products and strong professionalism. There are a large number of upstream manufacturers, but the products provided by a single brand are limited. The downstream customer group is large, but the purchase batch is small. The life science reagent industry needs a professional one-stop service provider as a bridge between upstream manufacturers and downstream customers.
Yuningwei takes antibody as the core and provides comprehensive technical services based on one-stop platform
Based on the investment of more professional technicians related to biology and computer and the accumulation of core technologies of products, services and business platforms, the company has built a one-stop comprehensive service platform for life science, which has the following competitive advantages:
(1) Characteristic product portfolio and application technology scheme: it integrates antibody products of more than 50 well-known brands in the industry. At present, it provides more than 4.69 million kinds of life science reagent SKUs, and provides customers with characteristic antibody products in various research fields. It is one of the most comprehensive suppliers of antibody varieties and specifications in China.
(2) Professional comprehensive technical services: the company has established a professional technical support team. While providing life science scientific research products, the company also provides supporting services such as experimental services and technical support services throughout pre-sales, sales and after-sales links, which can effectively meet the diversified experimental needs of customers and help customers carry out scientific research experiments quickly and efficiently.
(3) Intelligent supply chain system: the company has built an e-commerce platform and fully combined ERP system, WMS logistics system, third-party international / China logistics system, wechat invoice applet, etc. to realize the whole process traceability of orders, greatly increase information transparency and improve transaction efficiency.
Market review: the biomedical sector rose 3.1% this week, outperforming the CSI 300 index by 2.72 PCT and the gem index by 2.33 PCT, ranking ninth among 30 CITIC primary industries. All sectors of CITIC pharmaceutical rose this week, with Chinese herbal pieces, pharmaceutical circulation, medical services, chemical APIs, Chinese patent medicines, chemical agents, biomedicine and medical devices rising by 8.26%, 8.02%, 4.48%, 4.25%, 3.69%, 3.18%, 3.10% and 2.86% respectively.
Investment suggestions:
Recent view: as the sector recovers, two ideas are suggested in the short term: no game policy, and on the premise of relative immunity of the policy, it is preferred:
1. With rapid growth and continuous improvement in performance, it is estimated that it is still in a reasonable range, and grasp the valuation switching market. Vaccines: Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) , Chongqing Zhifei Biological Products Co.Ltd(300122) and Shenzhen Kangtai Biological Products Co.Ltd(300601) ; Oral consumables: Yantai Zhenghai Bio-Tech Co.Ltd(300653) (active biological bone will be approved soon); Upstream: Jenkem Technology Co.Ltd(688356) (PEG derivative), Nanjing Vazyme Biotech Co.Ltd(688105) (molecular enzyme), Acrobiosystems Co.Ltd(301080) (recombinant protein reagent).
2. Downside risk is limited, waiting for Fundamentals to catalyze. Blood products sector (leading enterprises are expected to benefit from the 14th five year plan of pulp stations in many provinces, and the growth of pulp volume is further opened, including Beijing Tiantan Biological Products Corporation Limited(600161) and Hualan Biological Engineering Inc(002007) ); Pharmacy sector ( Yifeng Pharmacy Chain Co.Ltd(603939) , Yixintang Pharmaceutical Group Co.Ltd(002727) ), Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) (short-term policy disturbance does not change the logic of long-term development), China’s leading sublingual desensitization Zhejiang Wolwo Bio-Pharmaceutical Co.Ltd(300357) ; China’s leading pharmaceutical glass enterprise Shandong Pharmaceutical Glass Co.Ltd(600529) .
Long term view: focus on the invariance in change and look for opportunities for relative certainty
With the continuous expansion of the impact of centralized mining, the opportunity at the investment level lies in that the foundation for the establishment of centralized mining is that “multiple enterprises supply mutually replaceable varieties, and the production capacity can be supplied indefinitely in theory”. The basis for enterprises to maintain product price and profit space is the competition pattern, and the dynamic excellent competition pattern lies in the ability to continuously develop products and product iteration, which remains unchanged.
Start DRG / Dip reform in 2022. As a means of payment, the core role of DRGs is to achieve a balance between improving the efficiency and quality of diagnosis and treatment and ensuring the sustainability of medical insurance through fine medical insurance management. Hospitals that cannot actively adapt to the rules of the game will be eliminated. The opportunity at the investment level lies in that excellent private medical institutions have paid more attention to cost control for a long time, with higher operation efficiency and competitive advantage.
The general trend of industrial development is: China Meheco Group Co.Ltd(600056) industrial manufacturing is upgraded, the competitiveness is continuously improved, and moves upstream in the global production value chain. The competitiveness of upstream raw materials is prominent:
1) Biological “core” – life science support industrial chain: domestic enterprises have developed rapidly, reagent quality has reached the international leading level, and their competitiveness has been continuously improved. Entering the overseas market through global comparative advantages, China benefits from domestic alternative logic, with high growth and great development potential.
2) IVD raw materials and consumables: the covid-19 epidemic opens a window for the transfer of the global IVD raw materials and consumables production supply chain to China.
Accelerated internationalization process: with the breakthrough of key technologies of Chinese enterprises, not only the localization rate of the Chinese market is accelerating, but also some high-quality enterprises have the strength to compete with international giants.
1. Manufacturing upgrading of pharmaceutical industry and continuous improvement of Competitiveness:
Upstream: life science support industry chain, IVD raw materials and consumables, related targets: Nanjing Vazyme Biotech Co.Ltd(688105) , Sino Biological Inc(301047) , Acrobiosystems Co.Ltd(301080) ;
High end medical devices: endoscope and sequencer, related subjects: Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) , Qingdao Novelbeam Technology Co.Ltd(688677) , Sonoscape Medical Corp(300633) , Aohua endoscope, Micro-Tech (Nanjing) Co.Ltd(688029) ; Huada Zhizao (IPO application in progress);
International layout of medical devices, related subjects: Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) , Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) ; Others: Jenkem Technology Co.Ltd(688356) , Shandong Pharmaceutical Glass Co.Ltd(600529) .
2. Focus on the supply pattern: blood products, related subjects: Beijing Tiantan Biological Products Corporation Limited(600161) , Boya Bio-Pharmaceutical Group Co.Ltd(300294) and Pacific Shuanglin Bio-Pharmacy Co.Ltd(000403) ; Desensitization preparation, related subject: Zhejiang Wolwo Bio-Pharmaceutical Co.Ltd(300357) .
3. Private medical service sector with differentiated competition. Ophthalmology, Aier Eye Hospital Group Co.Ltd(300015) ; Dentistry, Topchoice Medical Co.Inc(600763) ; Assisted reproduction, Jinxin reproduction; Cancer treatment services, Hagia.
4. Pharmacy sector. Related subjects: Yifeng Pharmacy Chain Co.Ltd(603939) , Dashenlin Pharmaceutical Group Co.Ltd(603233) , Lbx Pharmacy Chain Joint Stock Company(603883) and Yixintang Pharmaceutical Group Co.Ltd(002727) .
5. Aging and consumption upgrading.
Class II vaccine, related targets: Chongqing Zhifei Biological Products Co.Ltd(300122) , Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) and Changchun Bcht Biotechnology Co(688276) ; Invisible orthodontics, related subjects: Angel of the times;
Household medical devices, aging demand and improvement of payment capacity, related subjects: Jiangsu Yuyue Medical Equipment And Supply Co.Ltd(002223) , Cofoe Medical Technology Co.Ltd(301087) , Sinocare Inc(300298) ;
Rehabilitation equipment – demand awakening and policy support, related subjects, Shenzhen Lifotronic Technology Co.Ltd(688389) , Xiangyumedicalco.Ltd(688626) , Nanjing Vishee Medical Technology Co.Ltd(688580) .
Risk tips: policy risk, price risk, performance risk less than expected, product R & D risk, expansion progress risk less than expected, medical accident risk, uncertainty of overseas covid-19 virus epidemic, M & A integration risk less than expected, etc.
