Report guide
This week, the valuation of the pharmaceutical sector stabilized and sub sectors differentiated. Under the expected disturbance of covid-19 and the performance disclosure window, we continue to be optimistic about the investment opportunities of pharmaceutical advanced manufacturing (CXO + API + Preparation export).
Key investment points
Performance overview: medicine has entered the era of asset structure upgrading
This week, we combed the situation of A-share pharmaceutical companies that have disclosed the annual report of 2021 and the performance forecast of the first quarter of 2022. ① growth: 101 companies deducted non net profit, which increased year-on-year and 36 companies decreased year-on-year; ② Profitability: the deduction of non net profit margin of 76 companies increased year-on-year, and 61 companies decreased year-on-year; ③ The era of asset structure upgrading: we believe that medicine has entered a critical period of asset structure upgrading. At this stage, new boom fields continue to appear. The core driving force comes from the penetration of China’s innovation Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) chain (products and services) and international industrial division. The core fields include medicine CXO, innovative medicine / vaccine, life science research services and other fields.
This week’s performance: covid-19 disturbance, shock differentiation
This week, the pharmaceutical sector rose 0.02%, 2.41 percentage points lower than the CSI 300 index, ranking the ninth lowest among all industries. From the perspective of transaction volume, the proportion of transaction volume this week ranks at an all-time high. In terms of trading volume, the turnover of the pharmaceutical industry this week was 726 billion yuan, accounting for 15.6% of the total turnover of all a shares, down 0.6% from the previous week, 7.5pct higher than the central level since 2018, and the turnover is still at a historically high level. From the perspective of valuation, the overall valuation of the pharmaceutical sector this week (historical TTM, overall method, excluding negative values) was 29.5 times, up 0.2pct month on month. The valuation premium rate of the pharmaceutical industry relative to the CSI 300 was 149%, down 47 PCT from the previous week, significantly lower than the central level in the past four years (182.3%).
According to the classification of wind CITIC medicine, the rise and fall of the medicine sub section were differentiated this week. The medical devices and traditional Chinese medicine decoction pieces rose by 3.4% and 2% respectively, and the biological drugs and chemical agents fell by 3.2% and 2.6% respectively. According to the classification of key companies of Zheshang pharmaceutical, medical services, traditional Chinese medicine and R & D innovative pharmaceutical enterprises increased significantly this week, up 6.2%, 4.4% and 3% respectively; Characteristic APIs and biopharmaceuticals decreased significantly. Fell 8.2% and 3.2% respectively. Looking at the performance of individual stocks, the API sector was dragged down by the decline of Zhejiang Ausun Pharmaceutical Co.Ltd(603229) , Jiangxi Synergy Pharmaceutical Co.Ltd(300636) , Jiangxi Fushine Pharmaceutical Co.Ltd(300497) and other companies. We speculate that it may be related to the adjustment after the significant rise of relevant companies in the short term. We believe that the covid-19 specific drug industry chain outside China has increased the expansion space of large varieties for API and cdmo companies. Under the background of MPP landing and Pfizer specific drug global promotion and listing, we pay attention to the deeper participation and potential performance flexibility of China Meheco Group Co.Ltd(600056) manufacturing companies. For the biopharmaceutical sector, we believe that under the background of mRNA clinical expectations and sales of large single products (HPV, etc.) exceeding expectations, the configuration value of the biopharmaceutical sector is gradually strengthened. From the perspective of steady growth and large space, we continue to be optimistic about vaccine companies with prominent consumption upgrading attributes, such as Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) , Chongqing Zhifei Biological Products Co.Ltd(300122) , Cansino Biologics Inc(688185) , etc. In addition, after entering the intensive disclosure period of the annual report in April, the short-term performance growth may constitute a catalyst. We continue to be optimistic about the pharmaceutical manufacturing sector with relatively high growth in 2022q1 and clear medium and long-term industrial upgrading logic, such as CXO, API, pharmaceutical upstream and other companies.
Pharmaceutical investment strategy in 2022: grasp manufacturing and welcome innovation
We suggest that investors should break the “core assets” and “sector concept” so that they can look at the investment opportunities in the upstream and manufacturing links with the industrial chain thinking, and the innovative pharmaceutical machinery will continue to survive the fittest during the transition period. We believe that in 2022, medicine should adhere to the investment strategy of “grasping manufacturing and welcoming innovation”.
Specifically, it is recommended to focus on:
1) manufacturing sector: API, cdmo and other subdivided fields, recommended Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) , Apeloa Pharmaceutical Co.Ltd(000739) , Wuxi Apptec Co.Ltd(603259) , Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) , Porton Pharma Solutions Ltd(300363) , Hainan Poly Pharm.Co.Ltd(300630) , etc.
2) upstream: the upstream: pharmaceutical equipment, reagents, consumables, and other fields of pharmaceutical equipment, reagents, and consumables, and the upstream: the upstream: the fields of pharmaceutical equipment, reagents, consumables, and so on, and the fields of pharmaceutical equipment, reagents, and so on, and the fields of pharmaceutical equipment, reagents, and consumables, and the upstream: the upstream: the upstream: the fields of pharmaceutical equipment, reagents, consumables, and so on, and the fields of pharmaceutical equipment, and so on, and the fields of pharmaceutical equipment, reagents, and consumables, and so on, and the fields of pharmaceutical equipment, such as the fields of pharmaceutical equipment, and so on, and the recommendations are recommended for senszonzonzonzonpine international, and the Tofflon Science And Technology Group Co.Ltd(300171) Tofflon Science And Technology Group Co.Ltd(300171) Tofflon Science And Technology Group Co.Ltd(300171) Shanghai Titan Scientific Co.Ltd(688133) Qingdao Novelbeam Technology Co.Ltd(688677) etc.
3) innovation: for international equipment and pharmaceutical companies, it is recommended to pay attention to Micro-Tech (Nanjing) Co.Ltd(688029) , minimally invasive medicine, Beijing Balance Medical Technology Co.Ltd(688198) , Baiji Shenzhou, Xinda biology, Shanghai Junshi Biosciences Co.Ltd(688180) , kangfang biology, etc.
4) others: Other: consumer attributes, medical services, innovative supporting industry companies, medical services, and innovative supporting industry companies, recommending companies with consumer attributes, medical services, and innovative supporting industries, and recommending companies with Hangzhou Tigermed Consulting Co.Ltd(300347) \ , Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) , etc.
Risk tips
Changes in industrial policies; The price reduction of core products exceeded expectations; R & D progress is less than expected.
