Core view:
The performance of the pharmaceutical sector broke out in 2021, and Q1 remained high in 2022. From the perspective of revenue: the pharmaceutical sector has maintained positive growth for five consecutive years, with an average growth rate of 13.40%. In 2021, the pharmaceutical industry achieved a revenue of 2251043 billion yuan, a year-on-year increase of 13.25%; In 2022q1, the revenue was 621964 billion yuan, a year-on-year increase of 13.79%. From the perspective of profitability, the data are very bright. The net profit of the pharmaceutical industry in 2021 reached 223318 billion yuan, a year-on-year increase of 54.81%; The net profit of 2022q1 reached 227904 billion yuan, a year-on-year increase of 23.03%. From the perspective of profitability, the annual net interest rate in 2021 was 9.92%, an increase of 2.66 PCT over the previous year; In 2022, the net interest rate of Q1 reached 12.46%, an increase of 0.94pct over the same period last year. From the perspective of R & D, the R & D expenses of the pharmaceutical sector have increased rapidly and maintained positive growth for five consecutive years. The R & D expense rate in 2021 has reached 4.09%. In addition, with the policy guidance and the rising quantity and quality of medical demand, the long-term good situation of the pharmaceutical and biological industry is worth looking forward to.
API: disturbed in the short term and unchanged in the long-term industrial upgrading trend. In 2021, the API sub industry recorded a revenue of 105581 billion yuan, with a year-on-year increase of 15.27%. The revenue growth hit the bottom and rebounded. Especially under the background of the epidemic, China's API industry showed greater competitiveness. From the perspective of net profit level, the net profit of the sector in 2021 was 10.942 billion yuan, a year-on-year decrease of 12.37%, which was mainly affected by the price rise of raw materials since Q3 in 2021 and the rise of annual exchange rate. The gross profit margin and net profit margin decreased in 2021. In 2022, the revenue of Q1 API was 27.574 billion yuan, down 6.03% month on month. With the increase of capital expenditure and the development of new technologies, the growth of API sector is prominent in the long run.
Vaccine: covid-19 vaccine contributes increment, waiting for the recovery of conventional vaccine. In 2021, the company's revenue in the vaccine sector was 67.731 billion yuan, with a year-on-year increase of 49.94%. The revenue growth rate was further improved, mainly due to the vaccination of covid-19 vaccine outside China. The net profit recorded 19.446 billion yuan, with a year-on-year increase of 89.26%. In 2022, the revenue of Q1 vaccine company was 15.279 billion yuan, a month on month decrease of 20.87%, and the net profit of Q1 was 3.173 billion yuan, a month on month decrease of 7.59%. With the Q2 national epidemic under control, the conventional vaccine is expected to start in large quantities, driving the restorative growth of conventional business of relevant companies.
ICL: covid-19 epidemic situation is repeated, and the catalytic sector is growing at a high speed. In 2021, the revenue of ICL was 35.664 billion yuan, an increase of 31.12% year-on-year, benefiting from normalized nucleic acid detection. The annual net profit reached 4.707 billion yuan, a year-on-year increase of 43.43%. In 2022, the revenue of q1icl was RMB 11.896 billion, a year-on-year increase of 49.31%, and the net profit reached RMB 2.137 billion, a year-on-year increase of 81.08%. With the normalization of covid-19 testing and the continuous release of health care demand, ICL has huge growth space.
Blood products: the epidemic has a great negative impact and is expected to return to normal. In 2021, the revenue of the company in the blood products sector was 18.366 billion yuan, with a year-on-year increase of 16.99%. The revenue growth hit the bottom and rebounded, and the net profit recorded 4.767 billion yuan, with a year-on-year increase of only 0.28%. Affected by the demand side and transportation restrictions of hospitals in the epidemic area, the revenue of Q1 blood products in 2022 was 4.324 billion yuan, a month on month decrease of 76.46%. If the impact of the follow-up epidemic is weakened, the foundation for the steady development of the blood products industry will remain solid.
CXO: orders exceeded expectations, driving the revenue and net profit of CXO sector to maintain rapid growth in 2021; Due to the rise of upstream raw materials, the growth rate of net profit in 2022q1 decreased significantly. Thanks to high orders, the company's revenue of CXO in 2021 was 58.648 billion yuan, a year-on-year increase of 39.84%, and the annual net profit reached 15.072 billion yuan, a year-on-year increase of 50.22%. In 2022q1cxo, the company's revenue was 19.991 billion yuan, a year-on-year increase of 66.50%. The net profit recorded 4.149 billion yuan, a year-on-year increase of 17.29%, but the growth rate decreased significantly compared with 252.84% in the same period of the previous year, mainly due to the rise in the cost of upstream raw materials.
Traditional Chinese medicine: benefiting from channel reform and product price increase, the revenue and net profit of traditional Chinese medicine sector maintained steady growth in 2021; In 2022, the performance of Q1 traditional Chinese medicine company was affected by the spread of the epidemic and declined month on month. In 2021, the revenue of traditional Chinese medicine sector reached 324249 billion yuan, with a year-on-year increase of 7.67%, gradually getting rid of the impact caused by the epidemic, and the revenue growth turned negative to positive. The annual net profit was 32.588 billion yuan, a year-on-year increase of 15.91%. In 2022, Q1 traditional Chinese medicine sector recorded a revenue of 87.862 billion yuan, an increase of 7.08% month on month, and a net profit of 9.457 billion yuan, with an obvious decline month on month. It is expected that it is mainly affected by the spread of Q1 national epidemic, resulting in the obstruction of marketing and promotion.
Drugstores: the impact of the epidemic has led to a slowdown in the revenue growth of the drugstore industry and a decline in net profit in 2021. However, with the positive response of various companies, the operating revenue of the drugstore sector in 2022q1 has gradually recovered and the overall trend is good. In 2021, the revenue of drugstore companies was 74.324 billion yuan, with a year-on-year increase of 14.27%. However, the repeated epidemic has restricted the operation of some drugstores, and the growth rate of revenue has decreased significantly. From the perspective of net profit level, the pharmacy sector recorded 3.962 billion yuan in 2021, a year-on-year decrease of 1.95%. All companies actively responded to the impact of the epidemic. In 2022, the revenue of all companies in Q1 drugstore sector reached 20.390 billion yuan, a year-on-year increase of 16.93%, and the net profit was 1.215 billion yuan, a year-on-year decrease of 2.42%, mainly due to the increase in the cost of drugstores, including administrative expenses, affected by the epidemic.
Investment advice
We believe that covid-19 virus continues to mutate, and the epidemic will not end in the short term. In addition, China's epidemic prevention policy is the strictest among major economies, and covid-19 industrial chain will still benefit in the short term. However, with the situation of epidemic prevention and control getting better and better, the demand for medical services in the post epidemic era will rebound rapidly and return to a higher growth level. It is suggested to pay attention to high-quality stocks related to covid-19 industrial chain in the short term, such as vaccines, covid-19 small molecule drugs, ICL and other related targets; Long term focus on medical service related giants in accelerating expansion layout, such as ophthalmology, stomatology and other related targets.
Risk tips
Policy fluctuation risk; Risk of R & D failure; Covid-19 epidemic progress is uncertain.
