Key investment points:
Market review:
Last week, the overall performance of A-Shares was weak. The Shanghai index fell 4%, the Shenzhen Component Index fell 4.4% and the gem index fell 3.03%. All sub industries of shenwanyi fell, among which social service, household appliances, nonferrous metals and other industries led the decline, while power equipment, food and beverage, medicine and biology and other industries led the decline.
During the reporting period, the pharmaceutical and biological sector fell by 2.07%, outperforming the CSI 300 index by 2.15% and the gem index by 0.96%. Among the pharmaceutical sub sectors, pharmaceutical commerce and medical devices fell slightly, down 0.07% and 0.08% respectively; Chemical pharmaceuticals, traditional Chinese medicine, biological products and medical services fell by 2.20%, 2.21%, 3.14% and 3.35% respectively.
Industry highlights of the week:
1. Covid-19 virus antigen detection and application scheme (Trial) was issued / the food and Drug Administration approved the change of covid-19 antigen product detection and Application application of five manufacturers;
2. The National Medical Insurance Bureau issued the statistical express on the development of medical security in 2021;
3. Shanxi pharmaceutical machinery centralized bidding procurement network issued the notice on carrying out the inter provincial centralized procurement of traditional Chinese medicine decoction pieces by Sanming Procurement Alliance and filling in relevant procurement data;
4. Five Chinese enterprises listed in the United States have been listed in the provisional list of the foreign company Accountability Act (hfcaa) by the securities and Exchange Commission (SEC)
Industry Week view:
This week, the National Health Commission issued a notice on antigen self-test. As of March 13, the State Food and drug administration has approved 10 covid-19 antigen self-test reagents for sale. Under the background of normalization of epidemic situation and large population base, covid-19 detection has a huge demand. As a supplement to nucleic acid detection, antigen detection will usher in a broad market. We suggest to pay attention to: 1) at present, the enterprises whose covid-19 antigen self-test products have been approved for listing in China have the first mover advantage, so we suggest to pay attention to relevant listed companies; 2) Covid-19 antigen detection products are listed companies that have been approved abroad; 3) The antigen detection market is liberalized, and the orders of upstream raw material enterprises are expected to increase. It is suggested to pay attention to IVD upstream raw material enterprises; 4) Retail pharmacy that has signed cooperation with antigen self-test product manufacturers. However, in the long run, the centralized purchase of antigen detection reagents and the deterioration of competition pattern are inevitable. It is recommended to be cautious in predicting the profit space of relevant enterprises.
In the long run, we believe that under the background of medical insurance fee control and China Meheco Group Co.Ltd(600056) industrial upgrading, the pharmaceutical sector is dominated by structural investment opportunities. We suggest to pay attention to: 1) CXO sector is the only one in medicine that is not affected by policies and has high landscape. At present, the core problem of CXO sector is to kill valuation, and there is no significant change in fundamentals. 2) Policy immunization + undervalued value enables the OTC segment of traditional Chinese medicine to have performance growth momentum and valuation cost performance.
Risk factors: repeated risks in some parts of China, the risk of exceeding expectations in the implementation of policies such as cost control and volume procurement, and the risk of failure in the R & D and marketing of innovative drugs
