View of Medicine Week: pay attention to the investment opportunities brought by the rising price of some APIs
Recently, the prices of some bulk APIs have increased significantly, such as vitamin B5 / K3, caffeine, antibiotic intermediates, etc. The rise in vitamin prices is mainly due to the following reasons. First, from the perspective of cost, the rise in the price of main raw materials and tight supply lead to the rise in cost. Secondly, affected by national security and environmental protection policies, energy conservation and emission reduction and other factors, the production capacity of intermediates or APIs is limited, and the contraction of supply also promotes the price rise. Finally, the positive changes in the competition pattern and the manufacturer’s sales strategy also have a positive impact on the price. For example, the concentration of vitamin K3 industry has increased and the competition pattern has been improved; Affected by the epidemic and African swine fever, the price of calcium pantothenate has decreased significantly since the third quarter of 2020. It is basically due to the operation at a low price in 2021. After the price has been low for a long time, and the profitability of enterprises in the industry has decreased significantly, the willingness and consistency of price increase have increased. In addition, the recent performance of caffeine and antibiotic intermediates is also relatively strong due to factors such as rising costs.
In the field of vitamins, it is suggested to pay attention to Yifan Pharmaceutical Co.Ltd(002019) (calcium pantothenate has a high global market share) and Brother Enterprises Holding Co.Ltd(002562) (vitamin K3 is the leader, and the capacity of calcium pantothenate is gradually released); At the same time, it is suggested to pay attention to China’s leading caffeine enterprises Cspc Innovation Pharmaceutical Co.Ltd(300765) , Shandong Xinhua Pharmaceutical Company Limited(000756) and Sichuan Kelun Pharmaceutical Co.Ltd(002422) (the subsidiary CHUANNING biological core varieties include 6-APA, penicillin industrial salt, erythromycin thiocyanate, etc., which benefit greatly).
Market review: the Shanghai Composite Index fell 3.87% for the whole week (2022.4.182022.4.22) to close at 308692. Among the 31 SW primary industry indexes, textile and clothing, public utilities and beauty care ranked among the top three, of which textile and clothing increased by 4.09%; Nonferrous metals, steel and real estate led the decline, with – 8.08%, – 9.05% and – 9.20% respectively. The pharmaceutical and biological sector fell 7.34%, ranking 28th in weekly rise and decline. Since 2022, pharmaceutical biology has fallen by 22.42%, 3.65 percentage points lower than the CSI 300 index. In terms of subdivided industries, all subdivided sectors of medicine and biology continued to decline throughout the week, with biological products falling the most, reaching 8.83%. Since 2022, chemical APIs and pharmaceutical businesses have performed relatively well, with year to date declines of 15.46% and 18.44% respectively; Biological products was the weakest sub industry, down 26.74%.
From the performance of individual stocks, the top five stocks that rose last week were: Shanghai Yizhong Pharmaceutical Co.Ltd(688091) -u (36.89%), Inner Mongolia Furui Medical Science Co.Ltd(300049) (26.54%), Zhejiang Cheng Yi Pharmaceutical Co.Ltd(603811) (16.78%), Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) (12.17%) and Shandong Xinhua Pharmaceutical Company Limited(000756) (9.95%). The top five stocks with declines are: Zhuhai Hokai Medical Instruments Co.Ltd(300273) (- 38.19%), Jinghua Pharmaceutical Group Co.Ltd(002349) (- 29.00%), Dali Pharmaceutical Co.Ltd(603963) (- 28.12%), Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864) (- 25.83%) and Nanjing Vazyme Biotech Co.Ltd(688105) (- 25.22%).
Valuation: as of April 22, PE (TTM) of pharmaceutical and biological (SW) industry was 29.30 times and Pb (LF) was 3.32 times. It is still at a low level in recent years.
Risk warning: medical policy risk; Lower prices than expected; System risk.
