In March, the pharmaceutical sector exceeded the quota significantly, focusing on the three directions of quarterly report, covid-19 and traditional Chinese medicine. In March 2022, the pharmaceutical and biological sector rose by 0.87%, and the yield of Shanghai and Shenzhen 300 fell by 7.84% in the same period. Pharmaceutical outperformed Shanghai and Shenzhen 300 by about 8.71%, ranking fourth in 28 sub industries. Among them, pharmaceutical commerce, traditional Chinese medicine, medical services and chemical pharmaceuticals increased by 11.3%, 4.8%, 1.1% and 0.7% respectively, while biological products and medical devices decreased by 0.7% and 3.7% respectively. In March, the sector market mainly focused on the first quarterly report of the annual report, covid-19 related industrial chain and traditional Chinese medicine. The pharmaceutical sector has experienced three consecutive quarters of adjustment since July 2021. The current valuation is 28.6 times PE (37.2 times the historical average), entering a very comfortable configuration range. We believe that the whole year’s pharmaceutical sector market will continue to focus on the three main lines of performance, covid-19 and undervalued value, and continue to be optimistic about the continuation of the pharmaceutical sector market; Meanwhile, as April enters the first quarterly report window period, the weight of performance is expected to further increase. It is suggested to actively grasp it in combination with the quarterly report.
1) the quarterly report shows a bright eye: the annual report intensive disclosure period began in March, and from the 2021 annual report or performance express that has been disclosed, the 2021 annual report or performance express, the following sectors are showing bright eyes: 1) cdmo / cro: Shanghai Medicilon Inc(688202) \ (+ 75%, + 61%) Asymchem Laboratories (Tianjin) Co.Ltd(002821) （+30%，+48%）、 Pharmaron Beijing Co.Ltd(300759) （+114%，+42%）； 2) Vaccines: Chongqing Zhifei Biological Products Co.Ltd(300122) (+ 40%, + 209%), Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) (+ 224%, + 199%); 3) Medical devices: Zhejiang Orient Gene Biotech Co.Ltd(688298) (+ 1943%, + 185%), Guangdong Hybribio Biotech Co.Ltd(300639) (+ 146%, + 135%), Apt Medical Inc(688617) (+ 34%, + 88%), Eyebright Medical Technology(Beijing) Co.Ltd(688050) (+ 45%, + 77%), Shanghai Microport Endovascular Medtech (Group) Co.Ltd(688016) (+ 51%, + 47%), Guangzhou Jet Bio-Filtration Co.Ltd(688026) (+ 80%, + 45%). The performance of some companies that have released the forecast of the first quarter report of 2022 is also strong, such as Porton Pharma Solutions Ltd(300363) (the net profit attributable to the parent company in 2022q1 is increased by 270% – 290%, the same below), Guangdong Hybribio Biotech Co.Ltd(300639) (109% – 144%), Chongqing Zhifei Biological Products Co.Ltd(300122) (90% – 110%), Eyebright Medical Technology(Beijing) Co.Ltd(688050) (53% – 72%). During the April window period, we focused on the sectors and individual stocks that are expected to grow rapidly in the first quarter: ① cdmo / cro: the market pessimistic expectations are gradually released, the fundamentals of the sector remain strong, the boom is expected to continue, and the valuation is at a historical low; ② Vaccine: the epidemic situation continues and repeats, the needle is promoted in an orderly manner, and the valuation adjustment is in place; ③ API: Dilemma reversal superimposed covid-19 oral drug progress catalysis, API boom cycle starts, is expected to become the core main line of medicine throughout the year, and has continuous investment opportunities; ④ Detection industry chain: China has a tight epidemic situation, so it is suggested to grasp the investment window of antigen detection industry chain.
2) covid-19 industrial chain: the epidemic continues to spread in various places, and the covid-19 industrial chain continues to make progress. Catalysis: many covid-19 antigen self-test kits have been approved, Pfizer paxlovid has been written into the latest version of covid-19 diagnosis and treatment plan, Pfizer paxlovid MPP has been authorized, the clinical progress of Shanghai Junshi Biosciences Co.Ltd(688180) vv116 has been smoothly promoted, real organisms have successively applied for communication at class II and class III meetings, and yanyeyi s-217622 phase III clinical trial has been launched. From the repeated epidemic situation, the progress of oral drug research and development, the catalytic implementation of project orders to the final contribution to the performance, we are optimistic about the oral drug industry chain and testing with fundamental support and covid-19 business flexibility. The former is optimistic about overseas covid-19 drug original research cdmo, Chinese R & D and production OEM enterprises, overseas generic drug MPP authorization, etc., and the latter suggests paying attention to the detection targets of head IVD, as well as the cursor on relevant reagents and consumables.
3) traditional Chinese medicine: on March 29, the general office of the State Council issued the “14th five year plan” for the development of traditional Chinese medicine, which defined the guiding ideology, basic principles, development objectives, main tasks and key measures for the development of traditional Chinese medicine during the 14th Five Year Plan Period. This plan points out from the overall development goal that by 2025, the service capacity of traditional Chinese medicine will be significantly enhanced, the policy system will be further improved, the revitalization and development will achieve positive results, and the unique advantages will be brought into full play. Specifically, it mainly includes seven objectives: further improve the service system, accelerate the construction of characteristic talents, enhance the ability of inheritance and innovation, improve the development level of industry and health service industry, further enhance cultural influence Deepen international exchanges and cooperation and improve governance. In terms of main development indicators, including the number of traditional Chinese medicine medical institutions, the number of traditional Chinese medicine hospitals, the number of beds in public traditional Chinese medicine hospitals and other expected indicators, as well as the setting of a binding index for fever clinics in all three-level public traditional Chinese medicine hospitals and integrated traditional Chinese and Western medicine hospitals (excluding traditional Chinese medicine specialized hospitals). In our opinion, this planning is a top-level design of policy and strategic planning from multiple aspects of industry, service, payment, and so on. It’s a top-level design of policy and strategic planning for policy, service, service, payment, and strategic planning that defines the future development path of traditional Chinese medicine, and China’s traditional Chinese medicine industry is poiseto usher in a new round of development opportunities, driven by constant favorable policies for China’s traditional Chinese medicine industry, which is expected to usher in a new round of development opportunities, driven by constant policy. We believe that this planning has made policy and strategic planning and strategic planning from industry, service, service, payment, and so on multiple aspects including industry, service, payment, etc. we believe that this planning has made the top-level design and strategic planning for the future development path of traditional Chinese medicine. Driven by the constant favorable policies, China’s traditional Chinese medicine industry is expected to usher in a new round of development opportunities. It’s expected opportunities. It’s recommended to focus attention on industry chain related beneficiary targets, and it’s recommended to focus on industry chain related Tianjin Zhongxin Pharmaceutical Group Corporation Limited(600329) Chongqing Taiji Industry (Group) Co.Ltd(600129) , Henan Lingrui Pharmaceutical Co.Ltd(600285) , etc.
The epidemic situation continues to repeat, the promotion of vaccination is strengthened in an orderly manner, and the valuation of the vaccine sector is adjusted in place. It is suggested to make a positive layout. 1) The strengthening needle was promoted in an orderly manner, and the strengthening plan was optimized. By March 18, 2022, about 650 million people have completed booster vaccination (the coverage rate of booster vaccination has reached about 46%). On February 26, Zhifei’s recombinant protein and Cansino Biologics Inc(688185) adenovirus were approved for heterologous enhancement, while Kangtai’s inactivation was used for homologous enhancement, which is expected to thicken the performance orders of relevant companies. In addition, many studies have shown that the enhancement of mRNA vaccine on the basis of 2-shot inactivation can significantly improve the antibody level. It is suggested to pay attention to Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) , Walvax Biotechnology Co.Ltd(300142) . 2) Covid-19 vaccine related companies still have considerable performance when going to sea in multiple ways. There is still a large covid-19 vaccine gap overseas. The enhanced vaccination rate in low – and middle-income countries is only 0-4.43%, and the export demand is still strong. Chinese vaccine companies have exported covid-19 vaccine through whopq certification, transnational cooperation, remote registration and other channels. Among them, listed vaccine enterprises such as Cansino Biologics Inc(688185) , Chongqing Zhifei Biological Products Co.Ltd(300122) , clover biology have applied for whopq certification and entered the later stage. It is expected to have phased results in the first half of 2022.
3) China’s self funded vaccine market has accelerated, and the performance of head enterprises driven by heavy varieties is expected to take off. Each vaccine head enterprise has a large amount of heavy varieties or is about to be launched. With the increase of vaccination awareness under covid-19 epidemic, we expect the vaccination rate of large varieties to continue to increase and gradually approach the level of developed countries. Continue to highlight Chongqing Zhifei Biological Products Co.Ltd(300122) , Shenzhen Kangtai Biological Products Co.Ltd(300601) , Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) , Chengdu Kanghua Biological Products Co.Ltd(300841) , Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) , Hualan Biological Engineering Inc(002007) , Changchun Bcht Biotechnology Co(688276) .
Focusing on the highlights of April from April April to highlight the highlights of April April with the highlight of the highlight of the April April highlight of the following four months to highlight the following: focusingon the following four months of the \ , Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) , Nuo Chengjianhua, Zhejiang Ausun Pharmaceutical Co.Ltd(603229) , Zhejiang Tianyu Pharmaceutical Co.Ltd(300702) , Zhejiang Gongdong Medical Technology Co.Ltd(605369) , Zhejiang Starry Pharmaceutical Co.Ltd(603520) , Aurisco Pharmaceutical Co.Ltd(605116) .
In March, the average increase of key recommendations of Sino Thai medicine was 2.87%, outperforming the pharmaceutical industry by 2.00%, including Zhejiang Ausun Pharmaceutical Co.Ltd(603229) + 31.84%, Shenzhen Kangtai Biological Products Co.Ltd(300601) + 10.43%, Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) + 10.41%, Wuxi Apptec Co.Ltd(603259) + 8.13%, Asymchem Laboratories (Tianjin) Co.Ltd(002821) + 7.81%.
Highlights of the industry focus: (1) New Coronavirus pneumonia diagnosis and treatment plan (trial version ninth) released. (2) Five Chinese enterprises have been authorized by Pfizer covid-19 MPP. (3) The application scheme for covid-19 virus antigen detection (Trial) was issued. (4) The 14th five year plan for the development of traditional Chinese medicine was issued.
Market dynamics: in March 2022, the pharmaceutical and biological industry rose by 0.87%, and the yield of Shanghai and Shenzhen 300 fell by 7.84% in the same period. The pharmaceutical sector outperformed Shanghai and Shenzhen 300 by about 8.71%, ranking fourth in 28 sub industries. This month, pharmaceutical commerce, traditional Chinese medicine, medical services and chemical pharmaceuticals increased by 11.3%, 4.8%, 1.1% and 0.7% respectively, while biological products and medical devices decreased by 0.7% and 3.7% respectively. Based on the 2022 profit forecast valuation, the current valuation of the pharmaceutical sector is 28.4 times PE, the P / E ratio of all A-Shares (excluding the financial sector) is about 24.4 times, and the premium rate of the pharmaceutical sector relative to all A-Shares (excluding the financial sector) is 16.5%. Calculated by TTM valuation method, the current valuation of the pharmaceutical sector is 28.6 times PE, which is lower than the historical average (37.2 times PE), and the premium rate relative to all A-Shares (excluding the financial sector) is 49.6%.
Risk warning: the risk of policy disturbance, drug quality problems, and the risk of delayed information or untimely update of the public data used in the research report.
