Weekly market review (202204.11202204.15): last week, the pharmaceutical sector fell 3.3%, 2.3 percentage points lower than the Shanghai and Shenzhen 300 index, and the PE (TTM) of the pharmaceutical sector was about 28 times. Recently, Pacific Shuanglin Bio-Pharmacy Co.Ltd(000403) signed a long-term strategic cooperation agreement with a subsidiary of the Brazilian pharmaceutical giant to promote the registration and sales of Jing Bing in Brazil, or to open the road of long-term export of blood products. We combed and discussed the bottom opportunity of the blood products sector.
The 14th five year plan has been gradually implemented, and leading enterprises have ushered in a new era of incremental slurry supply. In the past decade, the number of plasma stations approved has been small. During the “14th five year plan” period, the state is expected to gradually liberalize the new plasma stations, the production of blood products depends on the plasma supply, and the ability of leading enterprises to obtain approvals is strong, which is expected to usher in a new era of incremental plasma collection and supply.
Albumin domestic substitution space is large, and the long-term export space of static propylene is open. In terms of albumin, 63.67 million bottles of human white were issued in 2021, with imported and domestic accounts for 65% and 35% respectively. There is still much room for domestic substitution. In terms of intravenous propylene, the per capita consumption of intravenous propylene in China is only 1 / 10 of that in the United States / Australia / Canada, and the selling price in China is significantly lower than that in overseas markets such as the United States / Britain / South America / Southeast Asia. Since the covid-19 epidemic, some Chinese blood products enterprises have seized the opportunity of emergency supply and began to supply intravenous propylene overseas. Recently Pacific Shuanglin Bio-Pharmacy Co.Ltd(000403) became the first enterprise in China to open long-term strategic cooperation in the export of blood products, Signed a long-term strategic cooperation agreement with Brazilian drug retail giant hyperapharma for no less than 5 years to promote the overseas registration and long-term sustainable export of Jingbing, opening up the long-term export space of Chinese blood products.
The price reduction of centralized collection of blood products is expected to be moderate, which is conducive to the large-scale production of products in the hospital after winning the bid. According to the recently announced bid winning conditions for centralized collection of blood products in Guangdong Province, the bid winning conditions can be met only if the enterprise’s quotation is equal to the lowest price in the historical region. We judge that the price reduction range of centralized collection is limited. At the same time, the blood products to be selected will receive 100% of the pre procurement volume and confirmed distribution volume of the alliance in the first year, which is conducive to product admission and hospital volume.
The valuation of blood products sector is at a historical low level in the past decade, with cost performance. On April 17, 2022, the PE of SW blood products was only 29 times, and the average valuation of the sector was 51 times, which was equivalent to the valuation level of Q2 in 2018 and close to the historical low valuation level of the sector since 2010. The opportunity at the bottom has emerged.
Zhou Du’s suggested focus portfolio: 1) Growth Portfolio: Pharmablock Sciences (Nanjing) Inc(300725) / Kingsley biotechnology / Focused Photonics (Hangzhou) Inc(300203) ; 2) Steady combination: gushengtang / Baicheng medicine / China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) ; 3) Elastic combination: Pacific Shuanglin Bio-Pharmacy Co.Ltd(000403) / Boya Bio-Pharmaceutical Group Co.Ltd(300294) / Guangdong Zhongsheng Pharmaceutical Co.Ltd(002317)
Investment suggestion: we are optimistic about the bottom opportunity of the blood products sector, mainly due to 1) the supply side: the 14th five year plan has entered a new period of supply increment, 2) the demand side: the long-term export of Jing C has been opened, 3) the Chinese market: the Chinese market is expected to have a moderate decline in centralized collection in Guangdong Province and win the bid to speed up the promotion of blood products in the hospital; 4) Valuation: the valuation of the sector is at a historical low, maintaining the “recommended” rating, and it is recommended to pay attention to Pacific Shuanglin Bio-Pharmacy Co.Ltd(000403) Boya Bio-Pharmaceutical Group Co.Ltd(300294) Beijing Tiantan Biological Products Corporation Limited(600161) Beijing Tiantan Biological Products Corporation Limited(600161) .
Risk tips: policy changes; The progress of product export is lower than expected; The decline of centralized mining was higher than expected
