Key investment points:
Market review: this week, the Shenwan pharmaceutical and biological sector index fell by 0.1%, outperforming the CSI 300 index by 2.6%. The pharmaceutical sector ranked 23rd in the Shenwan industry classification. CXO outsourcing service company expects high growth in Q1 performance and good performance in medical services, up 1.6%; The top five increases in medicine were Shanxi Zhendong Pharmaceutical Co.Ltd(300158) (+ 38.6%), Realcan Pharmaceutical Group Co.Ltd(002589) (+ 33.3%), Guangdong Taiantang Pharmaceutical Co.Ltd(002433) (+ 20.6%), Boji Medical Technology Co.Ltd(300404) (+ 19.9%), Guizhou Bailing Group Pharmaceutical Co.Ltd(002424) (+ 19.8%).
Industry policies and trends: 1) the State Council issued the “14th five year plan” for the development of traditional Chinese medicine: clarify the ten main tasks for the development of traditional Chinese medicine, and the traditional Chinese medicine industry ushered in a stage of rapid development; 2) National Medical Insurance Administration: China has received 3.2 billion doses of vaccine, and the cost of vaccine is more than 120 billion yuan; 3) Who evaluation report on the effect of traditional Chinese medicine in the treatment of covid-19 pneumonia: Traditional Chinese medicine is safe and effective in the treatment of covid-19 pneumonia, and member states are encouraged to consider China’s covid-19 epidemic mode of integrated traditional Chinese and Western medicine; 4) The centralized purchase of 76 large varieties of Chinese patent medicine is about to be launched, with a total scale of more than 10 billion, with a maximum decrease of 82.63%; 5) Shanghai Junshi Biosciences Co.Ltd(688180) : JunJing biomedical js113 drug clinical trial application has been accepted and is intended to be used for the treatment of EGFR mutant non-small cell lung cancer and other solid tumors; The company has formed an echelon of 3 commercialized products, 23 clinical products and more than 25 preclinical products; 6) Chongqing Zhifei Biological Products Co.Ltd(300122) it is estimated that the net profit attributable to the parent company in Q1 is about 1.78-1.97 billion yuan, with a year-on-year increase of 90% – 110%. 7) XinDa biology: cooperation with Eli Lilly development strategy, and obtained the exclusive right to commercialize the seatinib in Chinese mainland. 8) A number of covid-19 vaccines have been approved clinically: covid-19 vaccine of Shiyao group and Cansino Biologics Inc(688185) mRNA, and covid-19 vaccine of Sinopharm Zhongsheng second generation recombinant protein have been approved clinically.
Special topic of cell gene therapy industry: the development of CGT industry is in full swing, which is expected to lead the third pharmaceutical revolution, and is optimistic about the opportunities of cgt-cdmo. CGT includes cell therapy and gene therapy. Cell therapy can be divided into immune cell therapy, stem cell therapy and other somatic cell therapy. Car-t cell therapy has become a hot spot in immune cell therapy. Seven car-t products have been listed in the world, three of which are from China. Gene therapy, including viral vector therapy, gene editing and other technologies, has also developed rapidly in recent years. A variety of products have been approved to market all over the world, mainly in European and American countries. The development of cell and gene therapy, a new generation of biomedical technology, puts forward higher requirements for production, process and supervision, which gives birth to opportunities for cgt-cdmo. It is suggested to pay attention to Wuxi Apptec Co.Ltd(603259) , Porton Pharma Solutions Ltd(300363) , Pharmaron Beijing Co.Ltd(300759) , Heyuan biology, Kingsley Biotechnology, etc.
Investment strategy: the situation of covid-19 epidemic prevention and control in China is grim. Promoting the R & D and marketing of mutant covid-19 vaccine and covid-19 specific drugs has been listed as a key task by the state. This weekend, the who’s recognition of traditional Chinese medicine for covid-19 and the state’s approval of the clinical trial of new mRNA covid-19 vaccine and recombinant protein vaccine will continue to promote the epidemic prevention and control related sectors to become one of the most popular investment fields of medicine, We believe that the key directions are as follows: 1) mRNA covid-19 vaccine and industrial chain opportunities: mRNA vaccine has fully proved its safety and effectiveness overseas. For the industrial trend, China urgently needs to complete the technical route selection. It is suggested to focus on: 1. Enterprises of mRNA covid-19 vaccine: newly approved clinical Cansino Biologics Inc(688185) and stone Pharmaceutical Group, Walvax Biotechnology Co.Ltd(300142) Pre clinical Chongqing Zhifei Biological Products Co.Ltd(300122) (convinced of biological cooperation) and Shenzhen Kangtai Biological Products Co.Ltd(300601) (Jiachen Xihai cooperation), etc; 2. MRNA vaccine industry chain: plasmids (Kingsley biology, boten biology, and metabiology); Enzymes ( Nanjing Vazyme Biotech Co.Ltd(688105) etc.). 2) Covid-19 oral drug industry chain deserves continuous attention: 1. Pfizer covid-19 small molecule industry chain: MPP authorized enterprises focus on: Zhe Jiang Hua Hai Pharmaceuticalco.Ltd(600521) , Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) and Apeloa Pharmaceutical Co.Ltd(000739) etc; Cdmo focuses on: Porton Pharma Solutions Ltd(300363) , Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Wuxi Apptec Co.Ltd(603259) , etc; Focus on intermediate weight points: Shandong Jincheng Pharmaceutical Group Co.Ltd(300233) , Zhejiang Starry Pharmaceutical Co.Ltd(603520) , Ningbo Menovo Pharmaceutical Co.Ltd(603538) , etc; 2. Domestic covid-19 small molecule and industrial chain: azvudine (real biology is expected to uncover the blindness of phase III data in April) supply chain focuses on: Zhejiang Ausun Pharmaceutical Co.Ltd(603229) and Xinxiang Tuoxin Pharmaceutical Co.Ltd(301089) etc; Vv116 (the third phase of global multi center has been launched, and the production is expected to be reported within 22 years) focuses on: Shanghai Junshi Biosciences Co.Ltd(688180) ; Other 3CL target enterprises are pre clinical (among which Xiansheng pharmaceutical has just been approved for clinical application); 3. Traditional Chinese medicine covid-19 drugs: according to covid-19 diagnosis and treatment guidelines, focus on: Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Chongqing Taiji Industry (Group) Co.Ltd(600129) and Shandong Buchang Pharmaceuticals Co.Ltd(603858) etc. In addition, we continue to be optimistic about the market of traditional Chinese medicine and the first quarterly report: 1) we continue to be optimistic about the traditional Chinese medicine sector: under the guidance of the 14th five year plan of traditional Chinese medicine, traditional Chinese medicine will continue to be catalyzed by favorable policies, the support for traditional Chinese medicine will be reflected in the growth of the company’s revenue and profit, and the investment opportunities are expected to run through 2022. Focus on Chinese medicine innovation, brand OTC, formula granules, anti covid-19 Chinese medicine and other related targets: Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Shandong Buchang Pharmaceuticals Co.Ltd(603858) , Chongqing Taiji Industry (Group) Co.Ltd(600129) , Chinese medicine, Beijing Tongrentang Co.Ltd(600085) , China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) , Tianjin Chase Sun Pharmaceutical Co.Ltd(300026) , Guiyang Xintian Pharmaceutical Co.Ltd(002873) , etc. 2) Annual report and first quarterly report: at present, it has entered the intensive disclosure period of annual report and first quarterly report. According to the first quarter performance outlook released by us: focus on biological products: Chongqing Zhifei Biological Products Co.Ltd(300122) , Shenzhen Kangtai Biological Products Co.Ltd(300601) , Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) and Changchun High And New Technology Industries (Group) Inc(000661) ; Key focus of devices: Shanghai Kindly Enterprises Development Group Co.Ltd(603987) , Qingdao Novelbeam Technology Co.Ltd(688677) etc; CXO focuses on: Wuxi Apptec Co.Ltd(603259) , Porton Pharma Solutions Ltd(300363) , Baicheng medicine, etc; Drug concerns: Chongqing Taiji Industry (Group) Co.Ltd(600129) , Kpc Pharmaceuticals Inc(600422) , Hunan Jiudian Pharmaceutical Co.Ltd(300705) and Shenyang Xingqi Pharmaceutical Co.Ltd(300573) etc.
Portfolio this week: it is recommended to focus on Chongqing Zhifei Biological Products Co.Ltd(300122) , Shenzhen Kangtai Biological Products Co.Ltd(300601) , Nanjing Vazyme Biotech Co.Ltd(688105) , Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Chongqing Taiji Industry (Group) Co.Ltd(600129) and Kpc Pharmaceuticals Inc(600422) .
April portfolio: it is recommended to pay attention to Wuxi Apptec Co.Ltd(603259) , Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) , Chongqing Taiji Industry (Group) Co.Ltd(600129) , Aier Eye Hospital Group Co.Ltd(300015) , Chongqing Zhifei Biological Products Co.Ltd(300122) and Shenzhen Kangtai Biological Products Co.Ltd(300601) .
Risk tip: the industry demand is less than expected; The performance of listed companies is less than expected; Market competition intensifies risks.
