Industry view: with policy support, the traditional Chinese medicine industry is expected to achieve high-quality development. Notice of the State Food and Drug Administration on publicly soliciting opinions on the guiding principles of communication and exchange technology based on the “Three Combinations” registration and evaluation evidence system. Based on the measures for the administration of drug registration and the measures for the administration of communication and exchange of drug R & D and technical review, the guiding principles clarify the key nodes, meeting information requirements and concerns of communication and exchange in clinical aspects of different registration classifications for new traditional Chinese medicine developed under the “Three Combinations” review evidence system, and do not involve specific review technical requirements. This guiding principle is applicable to the application for clinical professional communication of traditional Chinese medicine compound preparations developed in the “Three Combinations” review evidence system. The release of the guiding principles further defines the process of new drug approval of traditional Chinese medicine, which will promote the high-quality development of the traditional Chinese medicine industry.
Investment strategy: Main Line 1: innovation Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) chain, including innovative drugs (machinery) and CXO. CDE’s new deal accelerates the evolution of “new ecology” of China’s innovation, and the industry is facing “re differentiation”. We should pay attention to companies with clinical Oriented Innovation Ability and license out ability. We suggest to pay attention to: Jiangsu Hengrui Medicine Co.Ltd(600276) , Baiji Shenzhou, Xinda biology, Corning Jerry, Shenzhen Chipscreen Biosciences Co.Ltd(688321) . In terms of CXO, we prefer cdmo and macromolecular CXO tracks by maintaining a high outlook. We suggest paying attention to: Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Porton Pharma Solutions Ltd(300363) , Pharmablock Sciences (Nanjing) Inc(300725) . Main line 2: products go to sea. The overseas market is a huge incremental market, there is a high threshold for the export of preparations, and the going to sea of medical devices has also become a new growth driving force of the industry. It is suggested to pay attention to: Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) , Hainan Poly Pharm.Co.Ltd(300630) , Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) , etc. Main line 3: consumer healthcare. With the growth of per capita disposable income, the demand for consumer medical care is increasing. At the same time, consumer medical products are self funded products, with independent pricing power and immunization fee control policy. It is suggested to pay attention to: Topchoice Medical Co.Inc(600763) , Aier Eye Hospital Group Co.Ltd(300015) , Yantai Zhenghai Bio-Tech Co.Ltd(300653) , etc. Main line 4: the traditional Chinese medicine sector has been in the adjustment stage for a long time, and the overall valuation is low. Enterprises with steady performance growth in the sector have high cost performance and prominent layout advantages. Moreover, the export of traditional Chinese medicine products is small and the internal circulation attribute is obvious, so it will not be disturbed by foreign policies towards China. Some traditional Chinese medicine products are more inclined to health care products with stronger consumption attributes, which can be benchmarked with some food enterprises. On this premise, we believe that the subject matter with sufficient adjustment and low valuation deserves special attention. Among them, enterprises with a larger proportion of OTC drugs in the fee control policy of immunization and medical insurance, better room for price increase of products and a smaller proportion of traditional Chinese medicine injections have greater flexibility. It is suggested to pay attention to: Henan Lingrui Pharmaceutical Co.Ltd(600285) , Kpc Pharmaceuticals Inc(600422) , etc. In addition to the above three main lines, there are also some other tracks with high prosperity and high barriers: including characteristic API 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) , and Yuanda medicine.
Highlights of the industry: 1) the Shanghai Municipal Health Commission issued the measures for the administration of non TCM practitioners to carry out TCM diagnosis and treatment activities; 2) Huadong Medicine Co.Ltd(000963) announced that it has reached strategic cooperation with Sheng Nochi in promoting the marketing of icariin soft capsules in the Chinese mainland market. 3) The listing application of Betta Pharmaceuticals Co.Ltd(300558) voronib tablets (CM082) was accepted; 4) The mitoxantrone nano drug of stone Pharmaceutical Group was approved for listing.
Market review: last week, the A-share pharmaceutical sector rose 2.41%, the Shanghai and Shenzhen 300 index fell 1.98% in the same period, and the pharmaceutical industry ranked first among 28 industries. Last week, the H-share pharmaceutical sector rose 7.07%, the Hang Seng Composite Index rose 3.83% in the same period, and the pharmaceutical industry ranked first among 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) Company risk: the company’s operation does not meet expectations.
