Market review: this week, the pharmaceutical and biological index fell 7.34%, 3.15 percentage points lower than the Shanghai and Shenzhen 300 index, and the rise and fall of the industry ranked 28th. Since the beginning of 2022, the pharmaceutical industry has fallen by 22.42%, 3.65 percentage points lower than the CSI 300 index, and the industry ranks 23rd in terms of rise and fall. This week, the valuation level (pe-ttm) of the pharmaceutical industry was 25.5 times, with a premium rate of 88% (- 9pp) relative to all a shares, 44% (- 5.6pp) relative to all A-Shares excluding banks, and 127% (- 12.6pp) relative to CSI 300. In terms of pharmaceutical sub industry, 0 sub industry sectors rose this week, and hospitals were the sub industry with the largest increase, with an increase of about – 3%. Offline pharmacies and chemical preparation sub industries ranked the second and third in terms of growth, about – 4.7% and – 6.2% respectively. The sub industry with the largest increase since the beginning of the year is pharmaceutical circulation, down about 8.4%.
Medicine is irrational and pessimistic in the short term, and can be doubly optimistic in the medium and long term. Under the background of severe epidemic situation, peripheral interest rate increase and contraction, RMB devaluation and macroeconomic pressure, the overall market has been significantly adjusted this week, and the pharmaceutical sector is also facing irrational decline in the short term. After nearly a year of correction, the valuation of the pharmaceutical sector has been at a historical low (26 times pe-ttm), and the current fund position in the pharmaceutical sector also belongs to a low region. Looking ahead, considering the impact of the epidemic on the operation in March and April, we believe that the pharmaceutical sector will usher in the bottom of performance in 22q1 and Q2, which is expected to improve in the third and fourth quarters, the medium and long-term fundamentals are stable, and the long-term funds can be doubly optimistic. We expect that the “social aspect clearing” of the follow-up epidemic is coming. It is suggested to add epidemic varieties, such as routine diagnosis and treatment services and new medical infrastructure related tracks (leading in medical services and medical equipment). Combined with the disclosure of the annual report and the first quarterly report, it is suggested to focus on three directions: the traditional Chinese medicine sector, the supply chain, such as the field of pharmaceutical equipment consumables, and undervalued and growing small cap stocks.
According to our annual strategy for 2022, in the era of normalization of medical insurance pressure and post epidemic, we will focus on looking for varieties of “through medical insurance” and “epidemic desensitization”. Medical insurance pressure will become the norm in the future. On the one hand, we believe that leading pharmaceutical enterprises such as Jiangsu Hengrui Medicine Co.Ltd(600276) , Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) etc. are expected to cross the “medical insurance border” through “continuous innovation + internationalization”; On the other hand, medical insurance immunization is still a better choice. For the downstream TOC end, focus on the varieties that do not account for medical insurance, such as self funded biological drugs, traditional Chinese medicine consumer goods, medical beauty upstream products, etc; The tob end at the upstream of the industrial chain is relatively immune to policies, such as the CXO section of the Chuang Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) chain. The equipment section includes pharmaceutical machinery equipment, pharmacy automation equipment, consumables production equipment, etc., and the field of life science reagents and consumables. In the post epidemic era, we think we should focus on the field of “desensitization” of the epidemic, 1) vaccine varieties or vaccine oversold varieties that are not disturbed by covid-19; 2) When peg is less than 1, the undervalued value or low expected variety with upward long-term fundamental trend; 3) The varieties of medical services that have been damaged by the previous epidemic and the recovery of demand in the future.
The steady combination of this week’week’s steady combination: Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) ( Jiangsu Hengrui Medicine Co.Ltd(600276) ).
The elastic combination of this week will be the elastic combination of the week: the elastic combination of the week’elastic combination of the week: ‘ Chongqing Taiji Industry (Group) Co.Ltd(600129) ( Shanghai Runda Medical Technology Co.Ltd(603108) ).
Risk warning: drug price reduction risk; The implementation progress of medical reform policy is lower than the expected risk; Risk of R & D failure.
