Weekly market review (202203.21202203.25): this week, the pharmaceutical sector rose 0.88%, outperforming the Shanghai and Shenzhen 300 index by 2.73 percentage points, and the PE (TTM) of the pharmaceutical sector was about 28.62 times, still at a historical low in recent ten years. This week, the Chinese medicine sector continues to lead the rise, and the “14th five year plan” of Chinese medicine is expected to be implemented in the near future. We will focus on the current situation and development prospects of the industry under the favorable policies.
The favorable policies of traditional Chinese medicine have been released intensively, and the industry has developed rapidly with high quality. The layout of policy support for traditional Chinese medicine has been for a long time. In February 2016, the State Council issued the outline of the strategic plan for the development of traditional Chinese medicine (20162030), which laid the general tone of supporting the development of traditional Chinese medicine. In the same year, it issued the 13th five year plan for the development of traditional Chinese medicine and other important documents, raising the development of traditional Chinese medicine to a national strategy. Since the epidemic in 2020, the status of traditional Chinese medicine treatment in national health has been increasing day by day, and various benefits have been continuously released. In 2021, the national favorable policies will enter the intensive release period again, follow the specific implementation of local policy guidance, and cooperate to support the implementation of “inheritance” and “innovation”.
Looking forward to the “14th five year plan” of traditional Chinese medicine, it is suggested to focus on the four directions of traditional Chinese medicine diagnosis and treatment, traditional Chinese medicine OTC, formula granules and innovative traditional Chinese medicine. Traditional Chinese medicine has a long history and strong mass foundation. The market prospect of traditional Chinese medicine health service is considerable. Looking forward to the “14th five year plan” period, it is suggested to focus on four directions: the market of traditional Chinese medicine diagnosis and treatment is expected to grow rapidly; The volume and price of OTC enterprises of traditional Chinese medicine have risen simultaneously, which is expected to maintain a steady growth trend for a long time; The end of the pilot market of formula granules will benefit the large-scale production of high-quality leading enterprises; Innovative research and development of traditional Chinese medicine is expected to rise rapidly.
Recommended portfolio of stocks this week: 1) Growth Portfolio: Pharmablock Sciences (Nanjing) Inc(300725) , kingship biotechnology, Focused Photonics (Hangzhou) Inc(300203) ; 2) Robust combination: Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) , Apeloa Pharmaceutical Co.Ltd(000739) , China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) ; 3) Elastic combination: Chongqing Taiji Industry (Group) Co.Ltd(600129) , Kpc Pharmaceuticals Inc(600422) , Henan Lingrui Pharmaceutical Co.Ltd(600285)
Investment suggestion: the traditional Chinese medicine industry is in the stage of gradual rise. 1) OTC of traditional Chinese medicine has no risk of centralized purchase, and the out of hospital market has independent pricing power, which helps to maintain a high profit margin. We focus on two directions. First, we have exclusive and confidential varieties and high intellectual property barriers. It is recommended to pay attention to Beijing Tongrentang Co.Ltd(600085) , Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) , Jianmin Pharmaceutical Group Co.Ltd(600976) , etc; Second, targets with Omni channel coverage and brand strength are recommended to pay attention to China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) , Chongqing Taiji Industry (Group) Co.Ltd(600129) , Henan Lingrui Pharmaceutical Co.Ltd(600285) , etc. 2) The direction of TCM diagnosis and treatment service has been supported by policies and is in a period of rapid growth. It is suggested to pay attention to gushengtang, the leading private TCM chain. 3) Under the trend of tracing the source of traditional Chinese medicine, enterprises providing high-quality traditional Chinese medicine Pieces / formula particles at the head are expected to benefit. It is suggested to pay attention to Chinese traditional Chinese medicine, Tianjin Chase Sun Pharmaceutical Co.Ltd(300026) etc. 4) The competition pattern in the field of innovative traditional Chinese medicine is good, and drug research and development has entered an intensive cashing period. It is suggested to pay attention to Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Guiyang Xintian Pharmaceutical Co.Ltd(002873) , Guizhou Sanli Pharmaceutical Co.Ltd(603439) , etc.
Risk warning: policy change risk; The risk that the product sales volume is less than expected; Regulatory risk
