Investment advice
The annual report of Listed Companies in the medical sector in 2021 and the first quarterly report of 2022 have been released one after another. The overall performance situation is gradually clear, and the medical sector still maintains a strong growth capacity. In terms of demand for epidemic prevention and control, covid-19 detection, especially antigen detection, benefited from the increased demand from overseas and China, and successfully achieved high performance growth in 2021q4 and 2022q1; On the other hand, the demand for routine medical treatment is gradually recovering. It is expected that relevant sectors and companies will still achieve strong rebound and growth in 2022.
Medical devices: focus on the recovery of diagnosis and treatment in the hospital, and the growth of domestic demand to the sea can be expected. Since the end of 2021, the overseas Omicron strain has been widely popular, and the demand for covid-19 testing products at home and abroad has driven the high-speed and large-scale production of Chinese enterprises. In terms of routine business, the epidemic suppression factors continue to weaken, the market’s concerns about policies are gradually alleviated, and the expectations of long-term growth ability and domestic substitution are constantly verified and strengthened. The routine medical devices and diagnosis sector in the hospital is expected to see a double rise in performance and valuation.
Medical services: it continues to grow in 2021 and is expected to be repaired strongly after the growth rate of 22q1 drops. With the recovery of diagnosis and treatment flow of medical institutions, the growth rate of the sector is expected to continue to increase in 2022. Social medical institutions are the direction of continuous policy encouragement, and the level of industry standardization is expected to be continuously improved. The leading enterprises in the sector with excellent diagnosis and treatment level, hospital management level, talent absorption ability and long-term development potential of business model deserve attention.
Biological products: focus on the recovery and volume of growth hormone and conventional vaccine. In 2021 and 2022 Q1, the overall development of the biological products industry was stable and the performance was stable. Listed companies in the field of growth hormone overcame the impact of the epidemic, and 22q1 still achieved rapid performance growth; The performance of the blood products company has achieved restorative growth in 21 years, and Q1 has been slightly under pressure due to the repeated impact of the epidemic in 22 years; In 2021, a number of domestic covid-19 vaccines were included in the emergency use license of the State Food and drug administration, which brought outstanding performance flexibility, and relevant enterprises achieved rapid performance growth; There is a strong demand for large single product conventional vaccines such as HPV vaccine, and high-speed and large-scale production continues to be achieved in 2021 and 2022q1.
Medical beauty sector: strict compliance is good for head product enterprises, and the prosperity is expected to recover quarter by quarter. The improvement of industry standardization is beneficial to the head product enterprises, and the performance of core upstream enterprises in the first quarter is good. It is expected that the number of people in stores will be gradually released and the subsequent consumption demand is expected to be gradually released. We are optimistic about the continuous expansion of Yimei track for a long time.
Pharmacy sector: the impact of the epidemic is at a low valuation, and we look forward to subsequent marginal improvement. In 2021, the pharmacy industry overcame various difficulties, actively achieved growth, and completed a number of mergers and acquisitions in the industry. With the gradual maturity of new stores and sub new stores, their profit release will further drive the subsequent performance growth of the industry. Optimistic about the development logic of the industry, it is suggested to grasp the opportunity of undervaluing the current value.
Traditional Chinese medicine sector: optimistic about the development of OTC industry, it is recommended to pay attention to high certainty enterprises. The policy side continues to be positive. The “14th five year plan” for the development of traditional Chinese medicine lists “highlighting the characteristic advantages of traditional Chinese medicine in health services” as the main task. The great health pattern of traditional Chinese medicine is emerging, and it is optimistic about brand traditional Chinese medicine, OTC and other subdivided fields. In addition, after the pilot phase of traditional Chinese medicine formula granules is completed, the industry is expected to increase its volume rapidly.
Key companies
Changchun High And New Technology Industries (Group) Inc(000661) , Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) , Aier Eye Hospital Group Co.Ltd(300015) , Imeik Technology Development Co.Ltd(300896) , China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) , etc.
Risk tips
The rebound of the epidemic exceeded expectations, affecting the risk of hospital diagnosis and treatment and consumption; The overseas epidemic situation is down, and the quantity and price of epidemic prevention and control materials are down; The policy of price reduction and fee control of centralized purchase exceeded expectations; Medical malpractice risk; Deterioration of industrial competition pattern, etc.
