Core view
Focus on CXO, antigen detection and related targets. This week, the biomedical sector rose 0.54% as a whole, outperforming Shanghai and Shenzhen by Joyvio Food Co.Ltd(300268) percentage points, outperforming the overall market. Shenwan ranked sixth in the industry, down three places from last week, weaker than the cyclical sectors such as real estate, non-ferrous metals and textile and clothing. The turnover this week reached 771.3 billion yuan, accounting for 16.2% of the total turnover of a shares, an increase of 1.4% over last week. Since the beginning of 2022, pharmaceutical biology has fallen by 12.05%, outperforming Shanghai and Shenzhen by Hunan Huamin Holdings Co.Ltd(300345) percentage points, and the price earnings ratio of Pharmaceutical Biology (TTM, overall method, excluding negative value) is 31.05x, which is in the quantile of 14.12% of the historical valuation in recent five years, which is at a historical low. It is suggested to pay attention to: Jiangsu Hengrui Medicine Co.Ltd(600276) , Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) , Wuxi Apptec Co.Ltd(603259) , Yaoming biology, Apt Medical Inc(688617) , Zhejiang Orient Gene Biotech Co.Ltd(688298) , Bgi Genomics Co.Ltd(300676) , Kingsley biotechnology, Apeloa Pharmaceutical Co.Ltd(000739) , Corning Jerry pharmaceutical-b, guichuangtong bridge-b, etc.
CXO entered the performance release period and achieved brilliant performance in 2021: on March 24, Wuxi Apptec Co.Ltd(603259) released its performance in 2021, realizing a revenue of 22.902 billion yuan, a year-on-year increase of 38.50%; The net profit attributable to the parent company was 5.097 billion yuan, a year-on-year increase of 72.19%. On March 23, Yaoming biology released its performance in 2021, realizing a revenue of 10.29 billion yuan, a year-on-year increase of 83.3%; The net profit attributable to the parent company reached 3.389 billion yuan, a year-on-year increase of 100.6%. On March 10, Pharmaron Beijing Co.Ltd(300759) released the 2021 performance express: the revenue was 7.444 billion yuan, an increase of 45% year-on-year; The net profit attributable to the parent company was 1.661 billion yuan, a year-on-year increase of 41.68%.
Covid-19 antigen detection “China + foreign” dual demand drivers: (1) China: on March 20, the National Medical Insurance Bureau issued a notice to effectively do a good job in the current epidemic prevention and control medical security work. All provinces temporarily included covid-19 antigen detection reagents and corresponding detection items into the provincial catalogue of basic medical insurance medical service items according to procedures. The relevant expenses incurred by the insured in the designated primary medical institutions shall be paid according to the current provisions of the overall planning area, and the purchase expenses in the designated retail drugstore can be paid by personal account. As of March 24, more than 22 provinces and cities across the country have completed covid-19 antigen testing and centralized collection / inclusion in medical insurance. (2) Overseas: on March 21, the UK government website announced three purchase orders for covid-19 antigen detection reagents, purchasing self-test products of £ 595 million (about 5 billion yuan), £ 237.8 million (about 2 billion yuan) and £ 85.1 million (about 700 million yuan) from Tanner Pharma ukltd, Medco Solutions Ltd and pharmaceuticals direct Ltd respectively. The product supplied by tannerpharma is Zhejiang Orient Gene Biotech Co.Ltd(688298) the orientgenerapidcovid-19 (antigen) self test. Although European countries gradually liberalize control measures, the demand for basic testing volume will still focus on leading manufacturers.
Risk warning: the product R & D progress is less than expected; The price reduction of centralized purchase exceeds the expectation
