Ping An View:
Industry perspective: the State Council issued the notice of the national health plan of the 14th five year plan to promote the development of the pharmaceutical industry in many aspects. The notice of the general office of the State Council on health planning issued on May 20, 2014. The plan mentions that by 2025, the health system will be improved, the basic medical and health system with Chinese characteristics will be gradually improved, the prevention and response ability of major epidemic situations and public health emergencies will be significantly improved, the unique advantages of traditional Chinese medicine will be further brought into play, the ability of health science and technology innovation will be significantly enhanced, the per capita life expectancy will continue to increase by about one year on the basis of 2020, and the per capita health life expectancy will increase in the same proportion.
The plan emphasizes the need to optimize and strengthen the health industry and promote the development of the industry in many aspects: 1) 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; 2) Promote the manufacturing and production of high-end medical equipment and health products – optimize the Innovation Medical Management Co.Ltd(002173) equipment registration review process. 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; 3) Promote the sustainable and standardized development of social run medical institutions – encourage social forces to set up non-profit medical institutions in areas with weak medical resources and in areas with shortages such as rehabilitation, nursing and mental health. At the same time, the plan places special emphasis on promoting the innovative development of the pharmaceutical industry, giving full play to the role of traditional Chinese medicine in health services, and implementing major projects for the revitalization and development of 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.
The plan involves the promotion and direction of the development of drugs, devices and medical services, encourages the innovation of drugs and devices, and emphasizes the promotion of the application of traditional Chinese medicine in the field of health. We believe that China’s medical industry will continue to achieve good and rapid development during the 14th Five Year Plan period.
Investment strategy: mainline 1: Investment Strategy: mainline 1: Investment Strategy: mainline 1: Investment Strategy: Investment Strategy: the main line 1: the coved-19 oral drug related industry chain. The Geneva patent pool (the organization for the Geneva patent pool (MPP) has successively announced that it will authorize eight Chinese pharmaceutical companies to produce pfpfizer and Merck’s coved-19 specific drugs. The production of related coved-19 drugs and the performance of industry chain enterprises is expected to benefit from the investment strategy: Investment Strategy: the main line 1: coved-19 oral medicine related industry chain. The Geneva organization for the pharmaceutical patent pool (MPP) has successively announced that it will authorize eight Chinese pharmaceutical companies to produce the covid-19 specific drugs for pfpfpfpfizer and Merck. The production of related coved-19 drugs related to coved-19 drugs and the performance of industry chain companies producing and industry chain enterprises is expected to benefit. Suggestions focus: the Zhe Jiang Hua Hai Pharmaceuticalco.Ltd(600521) Zhe Jiang Hua Hai Pharmaceuticalco.Ltd(600521) , Great Chinasoft Technology Co.Ltd(002453) Shandong Jincheng Pharmaceutical Group Co.Ltd(300233) , Geli pharmaceutical and Nanjing Hicin Pharmaceutical Co.Ltd(300584) , etc. Main line 2: in the traditional Chinese medicine sector, heavy support policies continue to be implemented to enhance confidence. Brand OTC traditional Chinese medicine has independent pricing power, while other proprietary Chinese medicines have moderate centralized purchase and price reduction, and the overall valuation of the sector is cost-effective. It is suggested to pay attention to: Kpc Pharmaceuticals Inc(600422) , gushengtang, Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) . Main line 3: create Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) chain. CXO maintains a high outlook and the valuation has hit the bottom. Combined with the valuation, policy and capital factors, we prefer cdmo and macromolecular CXO track. It is suggested to pay attention to: Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Porton Pharma Solutions Ltd(300363) , Pharmablock Sciences (Nanjing) Inc(300725) . Main line 4: in addition to the above three main lines, there are also some other tracks with high prosperity and high barriers: including characteristic API, preparation export and nuclear medicine. It is suggested to pay attention to: Zhejiang Starry Pharmaceutical Co.Ltd(603520) , Jiangxi Fushine Pharmaceutical Co.Ltd(300497) , Zhejiang Tianyu Pharmaceutical Co.Ltd(300702) , Yantai Dongcheng Biochemicals Co.Ltd(002675) , Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) , Hainan Poly Pharm.Co.Ltd(300630) , Yuanda medicine.
Industry highlights: 1) travere’s IgA Nephropathy Therapy sparsentan has won the priority review qualification of FDA; 2) The new Bayer / MSD heart failure drug vilixiapine was approved in China; 3) Barretinib, a treatment for alopecia areata by Lilly and Incyte, was approved for marketing in Europe; 4) Dupixent, jointly developed by Sanofi and regenerant, has been approved in the United States for the treatment of eosinophilic esophagitis.
Market review: last week, the A-share pharmaceutical sector fell 2.01%, and the Shanghai and Shenzhen 300 index rose 2.23% in the same period. The pharmaceutical industry ranked 28th among 28 industries. Last week, the H-share pharmaceutical sector rose 6.67%, the Hang Seng Composite Index rose 3.99% over the same period, and the pharmaceutical industry ranked fourth among the 11 industries.
Risk tips: 1) policy risk: policies such as medical insurance fee control and drug price reduction have a great negative impact on the industry; 2) R & D risk: pharmaceutical R & D investment is large and difficult, and there is the possibility of R & D failure or slow progress; 3) Corporate risk: the company’s operation does not meet expectations
