Core view: the leading companies in the traditional Chinese medicine sector have obvious cost performance and high allocation value
View of Medicine Week: the leading companies in the traditional Chinese medicine sector have obvious cost performance and high allocation value
In the covid-19 epidemic, traditional Chinese medicine has played an important role. In recent years, with the continuous improvement of the high-level attention to the cause of traditional Chinese medicine, various policies supporting the development of traditional Chinese medicine have been issued one after another. Especially in 20202021, favorable policies for the traditional Chinese medicine industry will be intensively introduced, involving drug evaluation, clinical use, medical insurance payment, medical service system construction and many other aspects. The policy environment of the traditional Chinese medicine industry will be greatly improved, and the industry is expected to usher in an inflection point.
It is suggested to pay attention to high-quality companies in the traditional Chinese medicine industry. The specific ideas are as follows: (1) brand leaders of traditional Chinese medicine, including Beijing Tongrentang Co.Ltd(600085) , Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) ; (2) Leading companies of innovative traditional Chinese medicine, Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Tasly Pharmaceutical Group Co.Ltd(600535) , Guiyang Xintian Pharmaceutical Co.Ltd(002873) and Jiangsu Kanion Pharmaceutical Co.Ltd(600557) ; (3) Formula granules leading Chinese traditional medicine and China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) ; (4) OTC Chinese patent medicine enterprises with obvious brand value include China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) , Henan Lingrui Pharmaceutical Co.Ltd(600285) and Jianmin Pharmaceutical Group Co.Ltd(600976) . From the perspective of valuation, the above-mentioned companies are basically near the valuation center in recent five years, with sufficient safety margin and high allocation value.
Market review: the biomedical sector rose 0.54% last week, ranking the 8th in terms of weekly rise and decline. Since the beginning of this year, pharmaceutical biology has fallen by 12.05%, outperforming the CSI 300 index by 3.45 percentage points, ranking 14th in all SW primary industries.
In terms of subdivided industries, several subdivided sectors of medicine and biology rebounded throughout the week, and medical services rose the most, up 4.49%; The performance of medical devices was the weakest, down 3.16%. Since 2022, the performance of chemical API and pharmaceutical business has been the best, with 3.99% and 0.08% year to date respectively; Medical services was the weakest performing sub industry, down 16.88%. Medical services (- 16.88%), biological products (- 14.27%) and chemical pharmaceuticals (- 12.79%) underperformed the pharmaceutical and biological (SW) industry index.
From the performance of individual stocks, the top five stocks that rose last week were: Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864) (61.08%), Chongqing Pharscin Pharmaceutical Co.Ltd(002907) (33.38%), Guilin Layn Natural Ingredients Corp(002166) (32.64%), Zhejiang Yatai Pharmaceutical Co.Ltd(002370) (31.32%) and Jinghua Pharmaceutical Group Co.Ltd(002349) (30.93%). The top five stocks with declines are: Pku Healthcare Corp.Ltd(000788) (- 16.21%), Nanjing Hicin Pharmaceutical Co.Ltd(300584) (- 15.81%), Jiangsu Sinopep-Allsino Biopharmaceutical Co.Ltd(688076) (- 14.74%), Frontier Biotechnologies Inc(688221) -u (- 14.64%) and Guangzhou Wondfo Biotech Co.Ltd(300482) (- 13.44%).
Valuation: as of March 25, PE (TTM) and Pb (LF) in the whole pharmaceutical and biological (SW) industry were 31.96 times and 3.89 times, still at a low level in recent years.
Risk warning: medical policy risk; Lower prices than expected; Systemic risk.
