Main points
Market review: this week (may 16-may 20), the A-share Shenwan pharmaceutical and biological industry index fell 2.01%, and the overall sector underperformed the Shanghai and Shenzhen 300 index by 4.24pct and the gem composite index by 4.52pct Among Shenwan’s 31 sub industries, pharmaceutical biology ranked 31st, with poor overall performance. The Hang Seng healthcare index of Hong Kong stocks rose 6.92% this week, outperforming the Hang Seng Index by 2.81pct, ranking third among the 12 Hang Seng comprehensive industry indexes.
Overseas antigen testing gradually entered the new normal in April, and the market pattern became more and more clear. According to the import and export data of China’s customs, the export value of China’s covid-19 detection reagent (Customs Code: 38221900) from January to April 2022 was 49.509 billion yuan, of which 13.291 billion yuan and 3.557 billion yuan were achieved in March and April respectively. The main reason for the month on month decline in April was that the number of infected people reached the trough after the peak of the overseas epidemic in the first quarter, and European and American countries successively relaxed epidemic prevention policies. We believe that after entering may, the global epidemic will maintain a relatively stable state. Without a new round of mutant strains, it can be considered that it will enter a new normal stage, and the demand for residual antigen detection will be relatively rigid, such as hospitals, schools, public officials, etc. Regardless of the demand in the outbreak stage, the total export volume of the whole year is expected to be about 50 billion yuan according to the monthly export volume of 4 billion yuan. From the perspective of market structure, different from the previous masks and gloves, the overseas antigen detection has a long verification cycle for the quality system and a high brand premium, and the advantages of the head company are becoming more and more obvious.
Antigen detection is expected to help Chinese enterprises return to work and production. China’s antigen self-test products were gradually released for use in mid March 2022. In just two months, nmpa approved 31 antigen self-test certificates for listing, contributing to the epidemic prevention and control in Shanghai, Beijing, Jilin and other regions. In addition, the mode of nucleic acid normalization detection supplemented by antigen detection is being implemented throughout the country. Through antigen detection, infected persons can be found in time, early detection and early isolation can be achieved, which will help to speed up the resumption of work and production. Taking Shanghai as an example, the Shanghai Economic and Information Technology Commission issued the guidelines for the prevention and control of the epidemic situation of industrial enterprises returning to work and production in Shanghai (the first edition) on April 16, which requires that on the premise of ensuring that the risk is controllable, the closed-loop management should be implemented to effectively promote the return to work and production of enterprises, and many application requirements for antigen detection should be listed in the guidelines. Enterprises are required to reserve antigen detection reagents for at least 14 days to further strengthen the application scenario of antigen self-test products. According to the announcement of Shanghai Health Commission, 126 million people were used for antigen detection from May 1 to 7 alone. In the future, antigen will still be an important detection force under the demand of dynamic clearing and resumption of work and production.
The financial data of listed companies tested for major antigens are excellent, and the value is expected to be revalued under the background of overseas + China normalization. We listed the characteristics of some financial indicators of Q1 in 22 years:
1) the amount of monetary capital is huge, and the price to book ratio is at a low point. Taking Hangzhou Alltest Biotech Co.Ltd(688606) as an example, the monetary capital of the company is up to 3.057 billion yuan, and the price to book ratio is only 1.68 based on the closing price of last Friday.
2) R & D expenses hit a record high, and a large amount of investment is expected to open a new era of development. Some listed companies in antigen detection 22q1 have invested more than 100 million yuan in R & D, which is expected to open a new era of development in multi joint inspection, upstream raw materials, biochips, small molecule drugs and so on.
Investment advice
Antigen detection has gradually entered the normalization stage, and the market pattern and price system have been optimized. Considering the current low valuation of the head company, it is recommended to pay attention to companies with sustained Q2 performance, large dividend proportion and expected to continue to reduce the price to book ratio, such as Hangzhou Alltest Biotech Co.Ltd(688606) , Zhejiang Orient Gene Biotech Co.Ltd(688298) , Wuhan Easy Diagnosis Biomedicine Co.Ltd(002932) , an Xu biology, Hangzhou Biotest Biotech Co.Ltd(688767) , etc.
Risk tips
Covid-19 epidemic situation is repeated; Risk of price reduction of drugs / consumables; Risks of changes in industrial policies, etc
