Key investment points:
Current market review
In the current period (3.26 – 4.09), the Shanghai Composite Index closed at 325185, up 1.23%; The CSI 300 index closed at 423077, up 1.35%; SME 100 closed at 804263, down 1.17%; In the current period, Shenwan pharmaceutical and biological industry index closed at 966597, down 3.47%, ranking 26th among Shenwan’s 31 primary industry indexes. The seven secondary sectors all lost the Shanghai Composite Index and CSI 300, and only the traditional Chinese medicine sector outperformed the small and medium-sized enterprises by 100.
Important information
The “14th five year plan” of traditional Chinese medicine came out! 15 development indicators and 10 key tasks!
On March 29, the general office of the State Council issued the “14th five year plan” for the development of traditional Chinese medicine, comprehensively deployed the work of traditional Chinese medicine during the 14th Five Year Plan period, and put forward the specific development goals of traditional Chinese medicine service system, characteristic talent team, inheritance and innovation, industry and health service industry, culture, open development and governance level, as well as 15 main development indicators.
Strengthen the needle and then strengthen it! Pfizer’s fourth dose of covid-19 vaccine was authorized by FDA for emergency use
On March 29, Pfizer and biontech announced that the FDA had expanded the scope of emergency use of covid-19 vaccine for people aged 50 and over. In addition, the FDA also authorized the second dose of the vaccine to be administered to individuals aged 12 and over who are determined to have some low immune function and have received any approved covid-19 booster.
National Medical Insurance Administration: covid-19 vaccine has been vaccinated for 3.2 billion doses, and the cost of more than 120 billion yuan is jointly borne by the medical insurance fund and the finance. At present, China has been vaccinated for 3.2 billion doses, and the cost of vaccine is more than 120 billion yuan, which is jointly shared by the medical insurance fund and the finance. The cost of vaccine is within the affordable range of the medical insurance fund.
Core view
In the current period, Shenwan pharmaceutical and biological industry index closed at 966597, down 3.47%, ranking 26th among Shenwan’s 31 primary industry indexes. The seven secondary sectors all lost the Shanghai Composite Index and CSI 300, and only the traditional Chinese medicine sector outperformed the small and medium-sized enterprises by 100.
In terms of epidemic situation, the global epidemic is still in the stage of pandemic, and the epidemic situation in countries and regions around China is in an outbreak trend. The number of newly confirmed local cases and asymptomatic infections in China has increased rapidly, the epidemic has spread in many places, and the scope of the epidemic has further expanded. The community transmission in some areas has not been blocked, and there are reports of spillover cases. The situation of prevention and control is grim and complex. In particular, the epidemic situation in Shanghai and other places is developing rapidly, and the epidemic prevention and control is in a critical period. In terms of vaccination, as of April 8, 2022, China has reported 3.293 billion doses of covid-19 virus vaccine. Covid-19 vaccination for the elderly in China has achieved certain results. According to statistics, more than 264 million Chinese people aged 60 and over have been vaccinated with covid-19 virus, and more than 212 million have completed the whole process of vaccination. However, there are still more than 50 million elderly people who have not been vaccinated in the whole process. The effectiveness of the vaccine has been confirmed by real-world studies. According to the data of patients in Hong Kong, the case fatality rate without vaccination is 3.2%, the case fatality rate of one shot is 0.96%, the case fatality rate of two shots is 0.14%, and the case fatality rate of three shots is 0.03%. Three shot vaccination can effectively reduce the mortality of Omicron infection. The above data suggest the necessity of vaccination to strengthen epidemic prevention and control.
In terms of news, according to the latest weekly epidemiological update of covid-19 released by the World Health Organization, the community infection rate of a covid-19 recombinant variant called “Xe” seems to be higher than that of Omicron’s ba The covid-19 variant is nearly 10% higher than the covid-2 variant, which is the most infectious covid-19 variant known to date. The uncertainty of the epidemic situation still exists in the future. The potential highly infectious strains suggest the needs of the epidemic related industrial chains such as vaccine, detection and treatment.
Positive clinical trial results from domestic covid-19 oral drug. On April 6, Kaifa pharmaceutical announced the key data and results of phase III clinical trial of prochloramide in the treatment of mild and moderate non hospitalized covid-19 patients (nct04870606). The clinical mortality rate of the trial was greater than 1:100 for all subjects taking Prozac and placebo for at least 1:7 days, and the corresponding mortality rate of all subjects taking Prozac and placebo was greater than 1:100 for all randomized controlled subjects; In subjects with high-risk factors, prochloramide significantly reduced hospitalization / mortality (P 0.02), with a corresponding protection rate of 100%. In addition, prochloramide also significantly and continuously reduced covid-19 viral load and improved covid-19 related symptoms. In addition, extensive clinical trials of covid-19 vaccine were intensively approved, suggesting that broad-spectrum vaccine is the research and development trend of covid-19 vaccine Cansino Biologics Inc(688185) , the mRNA vaccine of Shijiazhuang Pharmaceutical Group and the second-generation recombinant protein vaccine of China biology have all been approved for clinical use. Preclinical studies show that these vaccines are more broad-spectrum than the existing covid-19 vaccine developed based on the prototype strain, which can more effectively protect the body from the infection of existing mutant strains, and have good immune protection against the current mainstream mutant strains including Omicron and delta. The uncertainty of the epidemic situation and the ultimate goal of opening up confirm the investment opportunities determined by covid-19 industrial chain. However, with the R & D and innovation of various enterprises, covid-19 industrial chain will also face competition in the future, and enterprises with strong innovation ability and first mover advantage will benefit more.
In terms of antigen detection, China’s previous liberalization of antigen detection has formed an effective supplement to the existing nucleic acid detection, and spawned the detection incremental market. On the other hand, the multi-point outbreak and the change of detection policy further clarify that the country puts forward higher requirements for epidemic prevention on the premise of steady growth, and the epidemic prevention policy will not be relaxed in the short term. Combined with the capital market trend curve of the industrial chain since the outbreak of covid-19, we previously believed that covid-19 antigen detection sector, like the previous industrial chain links, showed a general rise in the short term, and then rapidly differentiated after the increase of production approvals. Enterprises with outstanding comprehensive competitiveness are expected to contribute more prominent alpha, which is also verified by the market trend. Secondly, the initial average price of covid-19 antigen detection was between 20-30 yuan, and now there has been a significant decline. The starting price of China’s application is lower than that of nucleic acid detection. The price decline after being included in medical insurance is very obvious to squeeze the profit space of midstream manufacturing.
At the same time, due to the low production threshold and the acceleration of approval, the price may continue to decline in the future, which is why we predicted that the overall market of the sector would last for a short time. Third, the application of covid-19 antigen detection is conducive to more timely detection of asymptomatic infections, which is very consistent with the high infectious characteristics of the current Omicron virus strain and its variants and the demand for timely detection of asymptomatic infections in epidemic prevention and control. The demand elasticity of antigen detection is weaker than that of nucleic acid detection market in the early stage. However, this does not mean that there are no long-term investment opportunities in the antigen detection sector. Due to the high consumption frequency, even if the price decreases, the contribution to the performance of the whole industry continues to exist. From the perspective of the industrial chain, the profit space downstream of covid-19 antigen detection will be squeezed to a large extent due to the impact of multiple factors such as downward price and accelerated approval. Compared with comparable companies in the same industry, it is suggested to focus on the advantages of upstream raw material supply and midstream covid-19 testing and manufacturing. Enterprises with rich enterprise lines and good competition pattern are expected to continue to benefit in a long cycle. It is suggested to continue to focus on innovative drugs and innovative drug industry chain and high industry: 1) it is suggested to focus on Nanjing Vazyme Biotech Co.Ltd(688105) and Acrobiosystems Co.Ltd(301080) in the upstream of covid-19 antigen testing; 2) In the middle reaches of covid-19 antigen detection, it is suggested to focus on Nanjing Vazyme Biotech Co.Ltd(688105) , Andon Health Co.Ltd(002432) and Zhejiang Orient Gene Biotech Co.Ltd(688298) etc.
On the whole, we believe that the focus of market repair may continue to focus on sectors with marginal improvement and valuation repair logic. At the time point when valuation switching is gradually approaching, the advance layout needs to pay particular attention to the sustainability of marginal improvement and growth. In the long run, with the continuous promotion of the procurement of drugs and consumables, enterprises with high safety margin, strong innovation ability, rich product pipelines and good competition pattern are expected to continue to benefit in the long cycle. It is suggested to continue to focus on the layout of innovative drugs and innovative drug industry chain, high-end medical devices, medical consumption terminals and medical consumption with scarcity and consumption attributes, and tap the second-line blue chips with relatively low valuation:
2) innovative drugs and the industry chain of innovative drugs and innovative drugs, including synthetic and specialist innovative drug enterprises, CXO industry, and the industrial chain of innovative drugs, including comprehensive and specialist innovative drug enterprises, and CXO industry. It is suggested to focus on the industry of innovative drugs and the industry chain of innovative drugs and innovative drugs, including the industrial chain of innovative drugs and innovative drugs, including the industry chain of innovative drugs and innovative drugs, including the industry chain of innovative drugs and innovative drugs, including the industry chain of innovative drugs and innovative drugs, including the comprehensive and specialist innovative drug enterprises, and the CXO industry. It is suggested to focus on the industry of comprehensive and specialist innovative drugs, and the CXO industry, and it is suggested to focus on the industry. It is suggested to focus on the ”6 Shenzhen Soling Industrial Co.Ltd(002766) 00276′ \ and Apeloa Pharmaceutical Co.Ltd(000739) etc;
2) it is recommended to pay attention to Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) and Lepu Medical Technology (Beijing) Co.Ltd(300003) as the leader of high-end medical devices with outstanding import substitution ability;
3) for medical consumption terminals benefiting from increased market concentration, it is recommended to pay attention to Yixintang Pharmaceutical Group Co.Ltd(002727) , Yifeng Pharmacy Chain Co.Ltd(603939) and Dian Diagnostics Group Co.Ltd(300244) etc;
4) biological products enterprises with scarcity and consumption attributes, including Chongqing Zhifei Biological Products Co.Ltd(300122) , Changchun High And New Technology Industries (Group) Inc(000661) , Hualan Biological Engineering Inc(002007) , Cansino Biologics Inc(688185) and Pacific Shuanglin Bio-Pharmacy Co.Ltd(000403) .
Risk tips: covid-19 epidemic fluctuation risk and market adjustment risk
