This week’s view:
The medical service sector ushered in the catalyst of policy improvement. It is suggested to seize the opportunity of oversold and lay out high-quality leaders. This week, the CSI 300 fell 0.99%, and the pharmaceutical and biological industry fell 1.38%, ranking 12th among the 31 primary sub industries. Among them, the sub sectors of traditional Chinese medicine and medical services rose by 2.94% and 2.33% respectively, and the biological products sector fell the most, by 5.17%. On the evening of April 13, the executive meeting of the State Council pointed out that it is necessary to expand consumption in key areas, promote consumption in medical and health care, pension and childcare, and support social forces to make up for the shortage of service supply. As an effective supplement to the public medical system, private medical services will be the direction of long-term policy encouragement and support. Since March, the epidemic situation has been repeated in some areas such as Shanghai and Jilin. Due to the tightening of prevention and control measures, the outpatient passenger flow of hospitals has also been affected in the short term. However, considering the rigid demand for medical services, the demand for diagnosis and treatment is expected to delay the outbreak after the epidemic situation eases, driving the passenger flow to rebound rapidly. Throughout the year, the base impact caused by the epidemic will gradually weaken, and the normalized growth in the post epidemic period can be expected. At present, the valuation of the sector has entered the appropriate allocation range. It is suggested to lay out the medical service leaders with oversold + high performance certainty, focusing on Aier Eye Hospital Group Co.Ltd(300015) , Topchoice Medical Co.Inc(600763) , haijiya medical, Jinxin reproduction, Xi’An International Medical Investment Company Limited(000516) , Ningbo Sanxing Medical Electric Co.Ltd(601567) and other medical service leaders. At the current time point, it is suggested to continue to grasp the fine molecule industries with high growth in Q1, such as cro / cdmo, vaccine, etc. Gradually focus on Q2, which may usher in fundamental improvement or sustained and rapid growth.
Q1 has a brilliant performance. The epidemic situation has repeatedly catalyzed the strengthening of needle vaccination, and is optimistic about the restorative volume of conventional varieties in 22 years. 1) The Q1 performance of the vaccine sector is brilliant: from the perspective of the first quarterly report / forecast, Chongqing Zhifei Biological Products Co.Ltd(300122) (Q1 parent return + 90-110%), the growth rate of Q1 parent return of Wantai, Kangtai and Kanghua is 40-50% +, and the conventional varieties achieve rapid and large-scale production. 2) Covid-19 vaccine: the challenge of covid-19 mutant strain and the length of vaccine protection still exists. The sequential strengthening was started at the end of February. Since March, there have been repeated outbreaks in many regions of China. At the beginning of April, there has been a lot of clinical progress in the mRNA vaccine and second-generation recombinant protein vaccine against covid-19 virus. The focus of covid-19 vaccine has gradually shifted from production capacity to effectiveness. It is suggested to focus on enterprises with sufficient covid-19 vaccine production capacity, reserve a variety of technical routes and leading R & D progress, such as Chongqing Zhifei Biological Products Co.Ltd(300122) , Cansino Biologics Inc(688185) , Shenzhen Kangtai Biological Products Co.Ltd(300601) , Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) , Walvax Biotechnology Co.Ltd(300142) , etc. 3) Conventional varieties: the impact of covid-19 vaccination disturbance will weaken in 2022 (the daily vaccination dose will be maintained at about 5 million doses, far lower than the peak value of 24 million doses). Large varieties such as diploid crazy vaccine and influenza vaccine are expected to have a restorative dose in 22 years, and continue to be optimistic about the rapid dose of HPV vaccine. In the next two years, domestic innovative vaccines will enter the centralized approval and large-scale period. Many heavy varieties such as tetravalent influenza, diploid crazy vaccine, 2-valent HPV and 13 valent pneumonia will usher in new domestic players, and the industry will enter the fast lane of development. 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) , etc.
Electrophysiology may be incorporated into the Alliance for centralized purchase, and the market share of domestic enterprises is expected to increase. On April 11, according to the news of China medical insurance, the national medical insurance bureau made unified deployment and coordination on the centralized procurement of local alliances. The centralized procurement of alliances to be promoted in 2022 includes: the procurement of Chinese patent medicine alliance led by Hubei, the procurement of oral implant alliance led by Sichuan, the Procurement Alliance of electrophysiology and endoscopic stapler led by Fujian, the Procurement Alliance of traditional Chinese medicine decoction pieces led by Shandong Guangdong will take the lead in purchasing covid-19 related testing reagents and consumables, and Jiangxi will take the lead in purchasing liver function biochemical reagents. Among them, electrophysiology was proposed to be included in the scope of centralized procurement of the Alliance for the first time. The technical barrier of cardiac electrophysiological intervention is high and the operation is difficult. The Chinese market has been monopolized by foreign-funded enterprises such as Johnson & Johnson and Abbott for a long time, and the localization rate in 2020 is only 9.6% (data source: Sullivan). Referring to the previous centralized purchase of staplers by the four provincial alliance of Chongqing and the eight provincial alliance of Chongqing, we believe that the industry pattern of electrophysiological consumables is expected to be reshaped after being included in the centralized purchase in the future, and several domestic enterprises with heads may seize more shares of imported brands. It is suggested to pay attention to domestic leaders such as Apt Medical Inc(688617) , electrophysiology and so on.
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One week market dynamics: Based on the analysis of the pharmaceutical sector from the beginning of 2022 to the present, the yield of the pharmaceutical sector is – 16.3%, the yield of CSI 300 in the same period is – 15.2%, and the yield of the pharmaceutical sector is 1.1% lower than that of CSI 300. This week, CSI 300 fell by 0.99%, and the pharmaceutical and biological industry fell by 1.38%, ranking 12th among 31 primary sub industries. The sub sectors of traditional Chinese medicine and medical services rose by 2.94% and 2.33% respectively, and biological products fell the most, by 5.17%. Based on the 2022 profit forecast valuation, the current valuation of the pharmaceutical sector is 26.86 times PE, the P / E ratio of all A-Shares (excluding the financial sector) is about 23.31 times PE, and the premium rate of the pharmaceutical sector relative to all A-Shares (excluding the financial sector) is 15.21%. Based on the TTM valuation method, the current valuation of the pharmaceutical sector is 27.9 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 44%.
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.
