This week, SW pharmaceutical and biological industry outperformed Shanghai and Shenzhen 300 index. From December 27 to December 31, 2021, the SW pharmaceutical and biological industry index rose by 3.16%, outperforming the CSI 300 index by about 2.77 percentage points over the same period. Among SW pharmaceutical and biological industry segments, only biological products recorded negative returns, down 1.49%; Pharmaceutical commerce, chemical pharmaceuticals, APIs, medical services, traditional Chinese medicine and medical devices increased by 7.70%, 4.13%, 4.06%, 4.01%, 3.62% and 3.17% respectively.
This week, there was a net inflow from the pharmaceutical and biological industry. From December 27 to December 31, 2021, the land stock connect had a net inflow of RMB 14.669 billion, including RMB 6.796 billion from Shanghai Stock connect and RMB 7.873 billion from Shenzhen Stock connect. In the Shenwan industry, the net inflow of power equipment ranks first, and the net outflow of public utilities ranks first. This week, the pharmaceutical and biological industry had a net inflow of 1.002 billion yuan, an increase over the previous week.
Industry news: the State Medical Security Bureau and the State Administration of traditional Chinese Medicine issued the guiding opinions on medical insurance supporting the inheritance, innovation and development of traditional Chinese medicine. The guidance clearly supports the inheritance, innovation and development of traditional Chinese medicine from the following six aspects: bringing qualified traditional Chinese medicine institutions into the designated medical insurance, strengthening the price management of traditional Chinese medicine services, bringing appropriate traditional Chinese medicine and traditional Chinese medicine medical service items into the payment scope of medical insurance, improving the payment policy suitable for the characteristics of traditional Chinese medicine, and strengthening the supervision of medical insurance fund. Decoction pieces of traditional Chinese medicine can continue to be sold at an additional 25%. Decoction pieces of traditional Chinese medicine / proprietary Chinese medicine / traditional Chinese medicine preparations will be included in the medical insurance catalogue, and the medical insurance channel will be expanded to retail pharmacies.
Maintain recommended ratings for the industry. The long-term demand of the pharmaceutical and biological industry is improving. It is recommended to pay attention to CXO advantage leaders Wuxi Apptec Co.Ltd(603259) (603259), Hangzhou Tigermed Consulting Co.Ltd(300347) (300347), Pharmaron Beijing Co.Ltd(300759) (300759), Joinn Laboratories (China) Co.Ltd(603127) (603127), Shanghai Medicilon Inc(688202) (688202), Asymchem Laboratories (Tianjin) Co.Ltd(002821) (002821), Kyushu Pharmaceutical (603456), Porton Pharma Solutions Ltd(300363) (300363), Pharmablock Sciences (Nanjing) Inc(300725) (300725), etc. Scientific services, focusing on Sino Biological Inc(301047) (301047), Nanjing Vazyme Biotech Co.Ltd(688105) (688105), etc. Medical devices: focus on platform faucets Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) (300760), medical beauty faucets Imeik Technology Development Co.Ltd(300896) (300896), ophthalmic device faucets Autek China Inc(300595) (300595), Eyebright Medical Technology(Beijing) Co.Ltd(688050) (688050), pharmaceutical equipment faucets Tofflon Science And Technology Group Co.Ltd(300171) (300171) and Truking Technology Limited(300358) (300358), rehabilitation medical device faucets Xiangyumedicalco.Ltd(688626) (688626), Nanjing Vishee Medical Technology Co.Ltd(688580) (688580), etc. In the short term, retail pharmacy leaders Dashenlin Pharmaceutical Group Co.Ltd(603233) (603233), Yifeng Pharmacy Chain Co.Ltd(603939) (603939), Yixintang Pharmaceutical Group Co.Ltd(002727) (002727), Lbx Pharmacy Chain Joint Stock Company(603883) (603883) are expected to benefit from the dual channel of negotiated drugs and usher in an inflection point. The policy side of the traditional Chinese medicine industry is relatively friendly. It is recommended to pay attention to Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) (600436), Yunnan Baiyao Group Co.Ltd(000538) (000538), Beijing Tongrentang Co.Ltd(600085) (600085), Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited(600332) (600332), China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) (000999), Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) (002603) with brand value and exclusive product advantages.
Risk tips: repeated epidemic, R & D failure, intensified industry competition, policy risk, product safety and quality risk, etc.
