Key investment points:
Current market review
In the current period (3.21 – 3.25), the Shanghai Composite Index closed at 321224, down 1.19%; The CSI 300 index closed at 417457, down 2.14%; SME 100 closed at 813769, down 2.46%; In the current period, Shenwan pharmaceutical and biological industry index closed at 1001380, up 0.54%, ranking eighth among Shenwan’s 31 primary industry indexes. Among the seven secondary sectors, traditional Chinese medicine, pharmaceutical commerce, chemical agents, medical services and APIs outperformed the Shanghai Composite Index, Shanghai and Shenzhen 300 and small and medium-sized 100.
Important information
The State Food and drug administration has approved 19 covid-19 virus antigen detection reagents
On March 23, the State Food and Drug Administration approved two covid-19 virus antigen detection reagent products. As of March 23, the State Food and drug administration has approved 19 covid-19 virus antigen detection reagent products. The drug regulatory department will strengthen the post marketing supervision of relevant products to protect the safety of patients.
National Medical Insurance Bureau: the total charge for covid-19 antigen detection shall not be higher than 15 yuan per person
In March 25th, the office of the National Health Insurance Bureau issued the notice on strengthening the price management of New Coronavirus antigen detection. The notice required that the provincial medical insurance departments should set the ceiling standard for the total price of COVID-19 antigen detection “price item + reagent”. At this stage, the capping standard shall not be higher than 15 yuan per person per time. If qualified, the capping standard can be reduced to a more reasonable level.
In 24 days, there have been more than 56000 local infections in China!
On March 25, the joint prevention and control mechanism of the State Council held a press conference. From March 1 to 24, more than 56000 cases of local infection were reported nationwide, affecting 28 provinces. The number of newly infected cases in Jilin Province and Changchun City is still at a high level for 24 consecutive months, of which more than 29000 cases are still reported every day. The epidemic situation in Shanghai, Hebei Province, Fujian Province and Liaoning Province has increased rapidly recently, and the risk of community transmission in the place where the epidemic occurs continues to exist
Core view
In the current period, Shenwan pharmaceutical and biological industry index closed at 1001380, up 0.54%, ranking eighth among Shenwan’s 31 primary industry indexes. Among the seven secondary sectors, traditional Chinese medicine, pharmaceutical commerce, chemical agents, medical services and APIs outperformed the Shanghai Composite Index, Shanghai and Shenzhen 300 and small and medium-sized 100.
In terms of epidemic situation, the global epidemic situation has the potential to make a comeback. On March 22 local time, the regional head of the World Health Organization warned that the complete lifting of restrictions on epidemic prevention and control in some European countries is leading to a surge in the number of infections and deaths. The epidemic situation in Asia is also not optimistic. Among them, the cumulative number of confirmed cases in South Korea exceeded 10 million for the first time, which is equivalent to one in five South Koreans infected with covid-19 virus. China’s epidemic prevention and control is in a critical stage, and the situation of epidemic prevention and control is grim and complex. From March 1 to 24, China has reported more than 56000 cases of local infection, affecting 28 provinces. Among them, Jilin Province has reported more than 10000 cases, another 4 provinces have reported more than 1000 cases, and 10 provinces have reported between 1001000 cases. In addition to the ninth edition of the diagnosis and treatment plan last week, China’s current epidemic prevention and control continues to adhere to the general policy of “dynamic clearing”, and emphasizes vaccination, especially for the elderly over the age of 60. In terms of vaccines, China has made steady progress in vaccination. As of March 25, China had received 3.248 billion doses of vaccines, according to the National Health Commission. According to wind data, the number of booster injections per 100 people in China is 45.65 times. Even compared with France (53.60 times), South Korea (63.32 times) and Denmark (62.14 times), there is still much room for improvement.
In terms of news, at present, more and more countries have started the fourth vaccination of covid-19 vaccine. On March 21 local time, the enhanced spring vaccination of covid-19 vaccine was launched in England, UK, for people over 12 years old with weak immune system three months after the completion of the third vaccination. On March 24, the Japanese Ministry of health, labor and welfare held a vaccine branch meeting and decided to purchase an additional 145 million doses of vaccine from Pfizer and Modena for the fourth vaccination. Vaccination targets are all people who have completed the third vaccination. In addition, about 740000 people in Israel have completed the fourth vaccination. The Israeli study found that one week and two weeks after completing the fourth vaccination, participants increased their antibodies against the Omicron variant by 8 and 10 times, respectively.
According to the recent performance and valuation of the vaccine sector (851523. SI), as of the third quarter of 2021, the net profit attributable to the parent of most enterprises in the vaccine sector showed positive growth. Driven by the large volume of covid-19 vaccine products, Chongqing Zhifei Biological Products Co.Ltd(300122) , Cansino Biologics Inc(688185) -u and Cansino Biologics Inc(688185) -u showed the most prominent growth in the net profit attributable to the parent; From the perspective of valuation, PE and Pb valuations of most vaccine companies are in the low quantile of recent and historical, with reasonable repair space. At present, there is still great uncertainty about the recurrence of the epidemic. The protective power of the third vaccine decreases over time. The demand for the fourth vaccine in various countries around the world is relatively determined. The demand for covid-19 vaccine is expected to be significantly improved compared with the previous one, and the performance probability of the sector continues to be high. At the current time point, it is suggested to focus on the repair opportunities of the vaccine sector, especially Cansino Biologics Inc(688185) -u and Chongqing Zhifei Biological Products Co.Ltd(300122) , which benefit from sequential vaccination in China. At the same time, we can pay attention to the R & D progress and commercialization process of mRNA vaccine path.
On the whole, we believe that the focus of market repair may continue to focus on the sectors with marginal improvement and valuation repair logic. The continuous strength of the API sector verifies our view. At the time point when the valuation switching is gradually approaching, the advance layout needs to pay particular attention to the sustainability of marginal improvement and growth. In the long run, with the continuous promotion of the procurement of drugs and consumables, enterprises with high safety margin, strong innovation ability, rich product pipelines and good competition pattern are expected to continue to benefit in the long cycle. It is suggested to continue to focus on the layout of innovative drugs and innovative drug industry chain, high-end medical devices, medical consumption terminals and medical consumption with scarcity and consumption attributes, and tap the second-line blue chips with relatively low valuation:
1) innovative drugs and the industry chain of innovative drugs and innovative drugs, including synthetic and specialist innovative drug enterprises, CXO industry, and the industrial chain of innovative drugs, including comprehensive and specialist innovative drug enterprises, and CXO industry. It is suggested to focus on ‘ Jiangsu Hengrui Medicine Co.Ltd(600276) ‘ \ and Apeloa Pharmaceutical Co.Ltd(000739) etc;
2) it is recommended to pay attention to Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) and Lepu Medical Technology (Beijing) Co.Ltd(300003) as the leader of high-end medical devices with outstanding import substitution ability;
3) for medical consumption terminals benefiting from increased market concentration, it is recommended to pay attention to Yixintang Pharmaceutical Group Co.Ltd(002727) , Yifeng Pharmacy Chain Co.Ltd(603939) and Dian Diagnostics Group Co.Ltd(300244) etc;
4) biological products enterprises with scarcity and consumption attributes, including Chongqing Zhifei Biological Products Co.Ltd(300122) , Changchun High And New Technology Industries (Group) Inc(000661) , Hualan Biological Engineering Inc(002007) , Cansino Biologics Inc(688185) -u and Pacific Shuanglin Bio-Pharmacy Co.Ltd(000403) .
Risk tips: covid-19 epidemic fluctuation risk and market adjustment risk
