Key investment points:
This week, SW pharmaceutical and biological industry outperformed Shanghai and Shenzhen 300 index. From January 10 to January 14, 2022, the SW pharmaceutical and biological industry index rose by 2.41%, outperforming the CSI 300 index by about 4.39 percentage points over the same period. All segments of SW pharmaceutical and biological industry recorded positive earnings. Medical devices, APIs, medical services, chemical pharmaceuticals, biological products, traditional Chinese medicine and pharmaceutical businesses increased by 7.71%, 4.41%, 1.78%, 1.29%, 1.13%, 0.72% and 0.14% respectively.
The net outflow of the pharmaceutical and biological industry this week increased compared with last week. From January 10 to January 14, 2022, the land stock connect had a net inflow of RMB 7.445 billion, of which the Shanghai Stock connect had a net inflow of RMB 7.465 billion and the Shenzhen Stock connect had a net outflow of RMB 20 million. In the Shenwan industry, the net inflow of power equipment ranks first, and the net outflow of non bank finance ranks first. This week, the pharmaceutical and biological industry had a net outflow of 1.744 billion yuan, an increase over the previous week.
Industry news: one belt, one road, was issued by the State Administration of traditional Chinese medicine (TCM). It is a notice to promote the integration of TCM into the “one belt and one way” development plan (2021 to 2025). The clear development goal one is: one belt, one road, and 30 high quality Chinese medicine overseas centers in 14th Five-Year. 30 international standards for Chinese medicine were promulgated, 10 Chinese medicine culture overseas dissemination brand projects were built, 50 international bases for Chinese medicine were built, and a number of export bases for traditional Chinese Medicine services were set up. Strengthen the construction of overseas registration service platform for traditional Chinese medicine products, organize and send TCM foreign aid medical teams, and encourage social forces to explore the construction of Sino foreign friendly TCM hospitals in a market-oriented manner.
Maintain recommended ratings for the industry. The number of new cases in overseas covid-19 epidemic hit a new high, superimposed with the outbreak of sporadic epidemic in many places in China, and catalysed the stock market of in vitro diagnostic reagents. We can pay attention to in vitro diagnostic reagent companies with strong ability to go to sea, products have obtained European and American Certification and can bring large performance increment, but companies with huge short-term growth should carefully catch up. Some CXO companies issued performance forecasts for 2021, Q4 maintained high growth, and CXO still maintained a high outlook. It is recommended to pay attention to CXO advantage leaders Wuxi Apptec Co.Ltd(603259) (603259), Hangzhou Tigermed Consulting Co.Ltd(300347) (300347), Pharmaron Beijing Co.Ltd(300759) (300759), Joinn Laboratories (China) Co.Ltd(603127) (603127), Shanghai Medicilon Inc(688202) (688202), Asymchem Laboratories (Tianjin) Co.Ltd(002821) (002821), Kyushu Pharmaceutical (603456), Porton Pharma Solutions Ltd(300363) (300363), Pharmablock Sciences (Nanjing) Inc(300725) (300725), etc. Scientific services, focusing on Sino Biological Inc(301047) (301047), Nanjing Vazyme Biotech Co.Ltd(688105) (688105), etc. Medical devices: focus on platform faucets Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) (300760), medical beauty faucets Imeik Technology Development Co.Ltd(300896) (300896), ophthalmic device faucets Autek China Inc(300595) (300595), Eyebright Medical Technology(Beijing) Co.Ltd(688050) (688050), pharmaceutical equipment faucets Tofflon Science And Technology Group Co.Ltd(300171) (300171) and Truking Technology Limited(300358) (300358), rehabilitation medical device faucets Xiangyumedicalco.Ltd(688626) (688626), Nanjing Vishee Medical Technology Co.Ltd(688580) (688580), etc. In the short term, retail pharmacy leaders Dashenlin Pharmaceutical Group Co.Ltd(603233) (603233), Yifeng Pharmacy Chain Co.Ltd(603939) (603939), Yixintang Pharmaceutical Group Co.Ltd(002727) (002727), Lbx Pharmacy Chain Joint Stock Company(603883) (603883) are expected to benefit from the dual channel of negotiated drugs and usher in an inflection point. The policy side of the traditional Chinese medicine industry is relatively friendly. It is recommended to pay attention to Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) (600436), Yunnan Baiyao Group Co.Ltd(000538) (000538), Beijing Tongrentang Co.Ltd(600085) (600085), Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited(600332) (600332), China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) (000999), Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) (002603) with brand value and exclusive product advantages.
Risk tips: repeated epidemic, R & D failure, intensified industry competition, policy risk, product safety and quality risk, etc.
