Investment suggestions and related targets: reiterate the “3 + 3” investment clue
This week, the pharmaceutical sub sector fell in an all-round way, and the pharmaceutical biological index fell by about 7.19%, 8.3 percentage points lower than the Shanghai and Shenzhen 300 index and 7.2 percentage points lower than the Shanghai Composite Index. Among the pharmaceutical level III sub industries, all 13 sub industries fell this week. API was the sub industry with the smallest decline, down 3.3%; From low to high, medical equipment (- 4.4%), hospitals (- 4.8%), medical R & D outsourcing (- 5.4%), offline pharmacies (- 5.5%), chemicals (- 5.5%), vaccines (- 6.9%), medical circulation (- 7%), traditional Chinese Medicine (- 7.8%), blood products (- 9%), medical consumables (- 10.9%) and in vitro diagnosis (- 13.1%). The traditional Chinese medicine track has been deeply adjusted with the whole industry. The market has become violent, and the track stocks are facing a great adjustment. This week Changchun High And New Technology Industries (Group) Inc(000661) was affected by the news of centralized purchase in Guangdong Province, and it fell by the limit for three consecutive times. Under the background of no new main line in the whole pharmaceutical market, we firmly believe that the track with performance, undervalued value and policy encouragement will run out and become a new main line in the future. Under the background of doing a good job in the logical research and judgment of the track, On January 16, 2022, our team released the in-depth topic 6 of the traditional Chinese medicine industry: the whole landscape of traditional Chinese medicine policies, focusing on the inheritance, innovation and development of traditional Chinese medicine at present, and grasping the first year of policies in the new era. Recalling the past and thinking about the present, stripping silk and cocoons and analyzing the policies in detail, our team further strengthened our optimistic investment value of traditional Chinese medicine in the medium and long term, This week’s share price adjustment gave investors a good buying opportunity.
For the investment of traditional Chinese medicine track, our team once again emphasizes the “3 + 3” investment clue and puts forward suggestions, focusing on three main lines and three themes.
Three main lines: Traditional Chinese medicine brands with time-honored brands, characteristic varieties with the ability to raise prices, and undervalued targets with incentives and guarantees.
Time honored brands: Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) , Beijing Tongrentang Co.Ltd(600085) , Yunnan Baiyao Group Co.Ltd(000538) , Guangyuyuan Chinese Herbal Medicine Co.Ltd(600771) etc;
Price increase: Jianmin Pharmaceutical Group Co.Ltd(600976) (covered, buy rating), Dong-E-E-Jiao Co.Ltd(000423) , Chongqing Taiji Industry (Group) Co.Ltd(600129) , Mayinglong Pharmaceutical Group Co.Ltd(600993) , Jiuzhitang Co.Ltd(000989) etc;
There are incentives: China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) (covered, buy rating), Henan Lingrui Pharmaceutical Co.Ltd(600285) , Kpc Pharmaceuticals Inc(600422) , Jiangzhong Pharmaceutical Co.Ltd(600750) , etc.
Three themes: innovation, region and industrial chain.
Innovative traditional Chinese medicine: Guiyang Xintian Pharmaceutical Co.Ltd(002873) (covered, buy rating), Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Jiangsu Kanion Pharmaceutical Co.Ltd(600557) , Tasly Pharmaceutical Group Co.Ltd(600535) , Hunan Fangsheng Pharmaceutical Co.Ltd(603998) etc.
Regional traditional Chinese medicine brands: Guizhou Sanli Pharmaceutical Co.Ltd(603439) (covered, purchase rating), Guilin Sanjin Pharmaceutical Co.Ltd(002275) , Teyi Pharmaceutical Group Co.Ltd(002728) , Hefei Lifeon Pharmaceutical Co.Ltd(003020) , etc.
Traditional Chinese medicine industry chain: Traditional Chinese medicine services (gushengtang (covered, buy rating)); Upstream planting and breeding industry chain + material inspection of traditional Chinese medicine ( Guizhou Xinbang Pharmaceutical Co.Ltd(002390) , Shanxi Zhendong Pharmaceutical Co.Ltd(300158) , Guizhou Bailing Group Pharmaceutical Co.Ltd(002424) , Focused Photonics (Hangzhou) Inc(300203) , Beijing Labtech Instruments Co.Ltd(688056) , Shanghai Runda Medical Technology Co.Ltd(603108) , Tofflon Science And Technology Group Co.Ltd(300171) , Maider Medical Industry Equipment Co.Ltd(688310) , Truking Technology Limited(300358) ); Midstream dealers (Chinese traditional medicine, Heilongjiang Zbd Pharmaceutical Co.Ltd(603567) ); Downstream pharmacies ( Dashenlin Pharmaceutical Group Co.Ltd(603233) , Yixintang Pharmaceutical Group Co.Ltd(002727) , Yifeng Pharmacy Chain Co.Ltd(603939) , Lbx Pharmacy Chain Joint Stock Company(603883) , Yunnan Jianzhijia Health-Chain Co.Ltd(605266) , Shuyu Civilian Pharmacy Corp.Ltd(301017) ); Layout of the whole industrial chain of traditional Chinese medicine (Chinese traditional medicine, Jointown Pharmaceutical Group Co.Ltd(600998) etc.).
Market Review
This week, the pharmaceutical and biological index fell by about 7.19%, 8.3 percentage points lower than the Shanghai and Shenzhen 300 index and 7.2 percentage points lower than the Shanghai Composite Index. The industry ranked 28th in terms of rise and fall. As of Friday (January 21), the PE (TTM) of the pharmaceutical industry was 31.98 times, below the “mean value – 1 times standard deviation” since 2015. Among the pharmaceutical level III sub industries, all 13 sub industries fell this week. API was the sub industry with the smallest decline, down 3.3%. Other biological products were the sub industry with the largest decline, down 16.3%. The sub industry with the highest valuation this week is the hospital, and the PE (TTM) is 77 times.
