Key investment points:
Current market review
In the current period (5.13 – 5.21), the Shanghai Composite Index closed at 314657, up 2.02%; The CSI 300 index closed at 407760, up 2.23%; SME 100 closed at 784924, up 2.94%; In the current period, Shenwan pharmaceutical and biological industry index closed at 892852, down 2.01%, ranking 31st among Shenwan’s 31 primary industry indexes. The seven secondary sectors all outperformed the Shanghai Composite Index, CSI 300 and SME 100.
Important information
Printing and distributing the national health plan of the 14th five year plan
According to the Chinese government website, the general office of the State Council issued the national health plan for the 14th five year plan (hereinafter referred to as the plan). The need to improve maternity and infant care services was mentioned. Implement the three child birth policy and improve relevant supporting measures. Improve the level of rational drug use; Promote the inheritance, innovation and development of traditional Chinese medicine, and implement major projects for the revitalization and development of traditional Chinese medicine; Promote the innovative development of the pharmaceutical industry. Encourage the R & D, innovation and use of new drugs, accelerate the R & D and industrialization of drugs urgently needed for the treatment of major diseases, and support the R & D of high-quality generic drugs.
Cansino Biologics Inc(688185) covid-19 vaccine included in the WHO emergency use list
Investment express on May 20, Cansino Biologics Inc(688185) adenovirus vector covid-19 vaccine kweisa has been included in the WHO emergency use list. The company still needs to conduct commercial negotiations with interested countries on the future sales of the product.
Keweisha is a single dose adenovirus vector covid-19 vaccine. It is constructed by genetic engineering method. It takes replication deficient human type 5 adenovirus as the vector and can express the S antigen of novel coronavirus. It is intended to prevent diseases caused by novel coronavirus infection and can be used for people over 18 years old.
Accelerating the development of life science industry, cardiovascular, infectious diseases, vaccines and so on have been paid special attention
Baker McKinsey international law firm and informapharma intelligence, a drug clinical research and development intelligence database, jointly released the third of the series of reports on the business development of life sciences, which discusses how pharmaceutical, biotechnology, medical equipment and medical technology companies will use emerging and existing resources to achieve growth in the next decade.
Core view
In the current period, Shenwan pharmaceutical and biological industry index closed at 892852, down 2.01%, ranking 31st among Shenwan’s 31 primary industry indexes. The seven secondary sectors all outperformed the Shanghai Composite Index, CSI 300 and SME 100.
In terms of the epidemic situation, the global Omicron epidemic is relatively stable this week. At present, the number of new cases per day is about 500000. The epidemic situation in China has been effectively controlled, and the number of new cases in a single day has decreased to about 200. In view of the characteristics of faster transmission, shorter incubation period and stronger concealment of the variant of Omicron virus, a normalized nucleic acid detection mechanism has been established all over the country, especially in provincial capital cities and cities with a population of tens of millions of people. Among various measures for epidemic prevention and control, nucleic acid detection is a key and effective means to quickly find the source of infection and then cut off the route of transmission. It plays a more prominent role in dealing with the epidemic of Omicron mutant. Therefore, although the current epidemic situation has been effectively controlled, nucleic acid testing, as a normalization strategy to prevent the epidemic situation, will have a wider demand in the future. In terms of vaccination, vaccination has made steady progress. As of May 21, 2022, China has reported 3.368 billion doses of covid-19 virus vaccine.
In terms of news, according to the Chinese government website, the general office of the State Council issued the national health plan for the 14th five year plan (hereinafter referred to as the plan). The plan defines the development goals. The plan mentioned the need to improve maternity and infant care services. Implement the three child birth policy and improve relevant supporting measures. The plan points out that the level of rational drug use should be improved. We will improve the rational drug use monitoring system covering hospitals at or above the national level, and gradually include grass-roots medical and health institutions in the monitoring. The plan also points out that we should promote the inheritance, innovation and development of traditional Chinese medicine. We will implement a major project to revitalize and develop traditional Chinese medicine. We will implement the health promotion action of traditional Chinese medicine and promote the upgrading of the health project of traditional Chinese medicine to treat and prevent diseases. Improve the service capacity of advantageous specialties of TCM hospitals at or above the prefecture level and characteristic specialties of county-level TCM hospitals, and strive for all county-level TCM hospitals to meet the basic standard of medical service capacity. Carry out the living inheritance of traditional Chinese medicine and the protection and utilization of ancient literature resources. Improve the evidence-based ability of traditional Chinese medicine. Promote scientific and technological innovation of traditional Chinese medicine. Accelerate the research and development of ancient classic and famous prescriptions. Promote the innovative development of the pharmaceutical industry. Encourage the R & D, innovation and use of new drugs, accelerate the R & D and industrialization of drugs urgently needed for the treatment of major diseases, and support the R & D of high-quality generic drugs. Promote the manufacturing and production of high-end medical equipment and health products. Optimize the review process of Innovation Medical Management Co.Ltd(002173) equipment registration. We will tackle key problems in original technologies and launch a number of high-quality medical equipment integrating new technologies such as artificial intelligence. Encourage qualified places to build medical equipment application and promotion bases, and create medical equipment industry clusters with perfect chains and distinctive characteristics.
We sorted out the position history of CXO sector in the pharmaceutical industry, and counted and summarized the fund positions of 24 listed companies in Shenwan medical R & D outsourcing (851563. SI) sector in recent years. On the whole, the proportion structure of fund positions in the pharmaceutical industry of CXO sector has shown an upward trend since 2020q1. From the perspective of the standard allocation proportion of sub sectors in the pharmaceutical and biological industry, as of 2022q1, the industry standard allocation proportion of CXO sector was 11.14%, and the overall over allocation proportion of the sector was 24.39%. The high over allocation proportion shows the high performance certainty and predictability of CXO sector. Driven by the R & D and production orders of domestic and foreign pharmaceutical enterprises, it is not affected by the price reduction of centralized purchase and other policies, and the market has a high outlook for a long time. At the company level, the number of funds held by most CXO companies and the proportion of fund holdings in circulating shares show an upward trend as a whole. Since the first round of centralized drug purchase and medical insurance negotiations, the drug price reduction for several consecutive years has accelerated the contraction game in some fields of the pharmaceutical industry. Under the background of clear international division of labor in the pharmaceutical industry chain, CXO sector has superimposed the cdmo demand brought by covid-19 pneumonia epidemic and continued to develop at a high speed. On the premise that the industry’s supply chain system is perfect and the labor cost, production efficiency and operation efficiency have outstanding comparative advantages, it continues to maintain a trend higher than the average growth rate of the industry.
On the whole, the current valuation of the pharmaceutical industry is at the bottom of history, and biological products, medical devices, traditional Chinese medicine and pharmaceutical businesses are significantly underestimated from the perspective of valuation. At the current time point, the medical sector with strong market demand and high prosperity has ushered in a good opportunity for long-term layout. In the short term, covid-19 treatment is still a definite opportunity to implement the whole year. It is suggested to pay attention to Shanghai Junshi Biosciences Co.Ltd(688180) -u, etc. In the long run, with the continuous promotion of the procurement of drugs and consumables, enterprises with high safety margin, strong innovation ability, rich product pipelines and good competition pattern are expected to continue to benefit in the long cycle. It is suggested to continue to focus on the layout of innovative drugs and innovative drug industry chain, high-end medical devices, medical consumption terminals and medical consumption with scarcity and consumption attributes, and tap the second-line blue chips with relatively low valuation:
1) innovative drugs and the industrial chain of innovative drugs and innovative drugs, including synthetic and specialist innovative drug enterprises, CXO industry, and the industry chain of innovative drugs, including comprehensive and specialist innovative drug enterprises, and CXO industry. It is suggested to focus on ‘ Wuxi Apptec Co.Ltd(603259) , Apeloa Pharmaceutical Co.Ltd(000739) and Shenzhen Salubris Pharmaceuticals Co.Ltd(002294) etc;
2) it is recommended to pay attention to Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) and Lepu Medical Technology (Beijing) Co.Ltd(300003) as the leader of high-end medical devices with outstanding import substitution ability;
3) for medical consumption terminals benefiting from the increased market concentration, it is recommended to pay attention to Yixintang Pharmaceutical Group Co.Ltd(002727) , Yifeng Pharmacy Chain Co.Ltd(603939) , Guangzhou Kingmed Diagnostics Group Co.Ltd(603882) and Dian Diagnostics Group Co.Ltd(300244) ;
4) biological products enterprises with scarcity and consumption attributes, including Chongqing Zhifei Biological Products Co.Ltd(300122) , Changchun High And New Technology Industries (Group) Inc(000661) , Hualan Biological Engineering Inc(002007) , Cansino Biologics Inc(688185) and China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) .
Risk tips: covid-19 epidemic fluctuation risk and market adjustment risk
