After sector adjustment, the pharmaceutical industry bubble has been released, and some of the sectors have entered a reasonable valuation range. The biopharmaceutical sector is expected to be relatively stable in 2022. Some sectors are expected to maintain high-profile growth, but they still need to be carefully selected.
Key points supporting rating
After bubble extrusion and rebalancing, investment in medicine sector is more rational. From 2019 to 2020, the pharmaceutical sector rose sharply driven by CrMo, API, medical services and other sectors. The leading companies in some sectors of the industry have a price earnings ratio of more than 100 times, and the valuation of the sector shows a high degree of bubble. Beginning in late 2021, there was foam extrusion in the sector. In February 2022, the performance of the pharmaceutical and biological sector was relatively stable, and some industries of the biomedical industry PE (TTM) have entered a reasonable valuation range. At the end of February, the PE (TTM) of the SW biomedical sector was 31.52 times, which has been at a relatively low level between 2019 and 2022. SW biological products and SW medical service PE (TTM) have been the same as that in early 2019, while PE (TTM) in medical device sector has been lower than that in early 2019. In 2022, the A-share pharmaceutical sector is expected to remain stable as a whole, but there are many local sector and individual stock opportunities, and small and medium-sized stocks are also expected to obtain excess returns.
Some sectors are expected to maintain prosperity, and investment needs to be carefully selected. The CXO industry is expected to maintain a high-profile growth in 2022, and the factors promoting the growth of the industry in 2021 will continue to work. Global biomedical R & D investment is expected to continue to grow steadily, and the trend of pharmaceutical R & D outsourcing is also expected to continue. Stock price and profit expectation on March 7, 2022: the expected P / E ratio of major companies in CXO industry based on the profit expectation in 2022 is about 50. If the average annual compound growth rate of major companies in the industry is 30% from 2023 to 2025, peg is expected to be about 1.5 in 2022, which has entered a reasonable valuation range. Leading companies with technology and core competitiveness are expected to undertake more orders and more complex businesses in the chemical small molecule business. Companies with low competitiveness in the industry will face the problem of reduced overall growth rate, and the investment is expected to enter the period of “fine selection”. Innovative medicine itself still has a good return on investment and is still an attractive investment field. After CDE released the guiding principles for clinical research and development of anti-tumor drugs guided by clinical value in 2021, the policy will gradually tighten the space for counterfeit new drugs with little clinical value and fierce competition. However, innovative drugs in the future face the problem of differentiation, which needs to be carefully selected.
Anti covid-19 medicine brings corresponding vaccine, specific drugs and testing needs. In 2020, the urgent need for vaccines and vaccine sectors in the world rose rapidly, and at the same time there was a bubble. China has widely vaccinated COVID-19 vaccine in the second half of 2021, and is expected to collapse quickly after the bubble burst. The price earnings ratio of the vaccine sector has been relatively low in 2022, but we still need to pay attention to the interference of covid-19 on the performance. Omicron is highly infectious, and the number of severe cases / deaths brought by Omicron cannot be underestimated. The adjustment of epidemic prevention needs to be made step by step. There is still a vacancy in the strengthening needle market, and the sequence of different sources has more advantages. Covid-19 small molecule drug has strong demand certainty, and domestic brands have entered the sprint stage, which is worthy of continuous attention. The trade-off between “vaccine + drug” and economic pressure is still the core of how to adjust epidemic prevention. In addition, covid-19 antigen detection has recently ushered in a policy east wind. Under the background of the severe Omicron epidemic in Jilin and Shenzhen, on March 11, the National Health Commission issued a document saying that antigen detection should be added as a supplement on the basis of nucleic acid detection. On the one hand, the Omicron strain with strong infectivity and weak pathogenicity highlights the advantages of antigen self-test. On the other hand, China’s antigen detection products are selling well all over the world. The technology has passed the test in overseas markets and has a certain production capacity. Therefore, we predict that antigen detection will overlay China’s broad overseas markets under the catalysis of the new epidemic prevention policy, It will bring investment opportunities in the antigen detection industry chain (especially in the field of upstream raw materials related to antigen detection and head terminal reagent enterprises), and the IVD sector deserves attention.
Key recommendation
\u3000\u3 Shengda Resources Co.Ltd(000603) 127 Asymchem Laboratories (Tianjin) Co.Ltd(002821) Porton Pharma Solutions Ltd(300363) Walvax Biotechnology Co.Ltd(300142) Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) Apeloa Pharmaceutical Co.Ltd(000739) Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) 。 It is suggested to focus on the following key points: Livzon Pharmaceutical Group Inc(000513) , Boya Bio-Pharmaceutical Group Co.Ltd(300294) etc.
Main risks of rating
Market liquidity risk, pharmaceutical policy risk, covid-19 epidemic uncertainty risk and epidemic prevention policy change risk, antigen detection reagent centralized procurement risk, the impact of RMB exchange rate change on export-oriented enterprises, international relations risk, individual stock risk, product R & D failure, etc.
