Thinking this week: Medical upgrading from the annual report data
As of April 23, 2022, 250 of the 446 companies in the A-share Shenwan pharmaceutical and biological sector had disclosed the annual report of 2021. We analyzed the driving factors of each sector from the two aspects of growth and profitability. We found that there is obvious differentiation between sectors. In the long run, CXO, scientific services, vaccines and innovative drugs may usher in sustained high growth on the basis of increasing penetration of international industrial division and increasing customer base and R & D capacity. In the short term, covid-19 epidemic supply chain (including specific drugs industry chain, nucleic acid and antigen detection industry chain, vaccine industry chain and related epidemic prevention materials industry chain) still has strong flexibility under China’s dynamic zero epidemic prevention policy and the continuous interpretation of overseas epidemic situations. It is suggested to continue to pay attention to relevant subjects from the above two dimensions.
Performance this week: the sector generally fell and the valuation was at an all-time low
The pharmaceutical sector fell 7.15% this week, 2.96 percentage points lower than the Shanghai and Shenzhen 300 index, ranking 26th in all industries. In terms of turnover, the turnover of the pharmaceutical industry this week was 433.3 billion yuan, accounting for 10.9% of the total turnover of all a shares, down 0.7pct from the previous week, 2.7pct 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 26 times, down 2.4pct month on month. The valuation premium rate of the pharmaceutical industry relative to the CSI 300 was 131%, down 12.5pct from the previous week, lower than the central level in the past four years (182.0%). According to the classification of wind CITIC medicine, there was a general decline across the board, including medical services (down 8.8%), chemical agents (down 8.3%), biomedicine (down 8.0%), pharmaceutical circulation (down 7.8%), Chinese patent medicines (down 7.2%), chemical APIs (down 5.8%) and decoction pieces of traditional Chinese medicine (down 5.4%). According to the classification of key pharmaceutical companies in Zheshang, biological drugs (down 10.2%), traditional Chinese medicine (down 8.4%), scientific research services (down 8.2%), medical devices (down 7.8%), characteristic API enterprises (down 7.7%), R & D and innovative pharmaceutical enterprises (down 7.2%), pharmaceutical services (down 6.3%) and Pharmaceutical Commerce (down 5.6%) all decreased significantly. In terms of individual stocks, Shanghai Titan Scientific Co.Ltd(688133) (up 4.6%) rose against the trend. We believe that the company is the first batch of enterprises to resume work in Shanghai and its products contain a large number of anti epidemic materials. Larger decreases include Nanjing Vazyme Biotech Co.Ltd(688105) , Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) etc., which are all up to 25%, mainly related to the news of some products under the epidemic situation. Vaccine sector, Chengdu Kanghua Biological Products Co.Ltd(300841) 422 fell to the limit, which may be related to the lower than expected next quarterly report affected by the epidemic. In addition, we continue to be optimistic about the pharmaceutical manufacturing sector and consumption attribute sector with relatively high growth and clear medium and long-term industrial upgrading logic in 2022q1, such as CXO, API, pharmaceutical upstream, consumption (vaccine / traditional Chinese Medicine) 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, and consumables, and the fields of pharmaceutical equipment, and the fields of pharmaceutical equipment, reagents, and consumables. The upstream: the upstream: the upstream: the upstream: the fields of pharmaceutical equipment, and the fields of pharmaceutical equipment, reagents, and consumables, and the fields of pharmaceutical equipment, reagents, and consumables, and the fields of pharmaceutical equipment, and so on the fields of pharmaceutical equipment, such as pharmaceutical equipment, reagents, and consumables, and so on, and the recommendations are recommended in the fields of senszonzonzonzonpine international, the Tofflon Science And Technology Group Co.Ltd(300171) Tofflon Science And Technology Group Co.Ltd(300171) of the Tofflon Science And Technology Group Co.Ltd(300171) 35171 payattention to Qingdao Haier Biomedical Co.Ltd(688139) etc.
3) innovation: equipment and pharmaceutical companies with international capabilities recommend Micro-Tech (Nanjing) Co.Ltd(688029) , minimally invasive medical treatment, etc., and pay attention to 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, and innovative supporting industry companies; consumer attributes, medical services, and innovative supporting industry companies; recommending Hangzhou Tigermed Consulting Co.Ltd(300347) ‘ \ , Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) , etc.
Risk tips
Changes in industrial policies; The end of the epidemic was not as expected; R & D progress is less than expected.
