I. review and theme of this week:
This week, Shenwan pharmaceutical index fell 7.19%, ranking 28th in the whole industry, losing the CSI 300 index and the gem index. In this week’s special topic, by combing the news and dynamic events related to the recent epidemic outside China, we further perceive the changes in the attitude towards the epidemic outside China and the response measures with characteristics, and put forward five major issues for China’s future anti epidemic for discussion.
II. Recent resumption:
Medicine fell sharply this week, ushered in a sharp decline on Friday, and the index hit a new low since June 2020. We believe that the reasons may be: the overall market is not good, the core assets that were thought to have gradually stabilized continue to decline, the stock price of high-tech enterprises has been affected by the centralized mining in Guangdong, which has raised policy concerns, and the recent strong theme sector of medicine has fallen in an all-round way. The size is not good, and the pressure on the whole index will be great. In terms of sub areas, although some adjustments have been made, the whole covid-19 therapeutic drugs and supply chain are relatively strong. Of course, there is a phenomenon that needs to be discussed as a whole this week. After MSD authorized covid-19 drug imitation, the whole epidemic line fell down comprehensively, which is in line with the characteristics of market sentiment, but it mistakenly killed the structural logic. Why do you say so? After all, in this wave, from covid-19 detection to covid-19 therapeutic drugs, most of the targets with large increase are marginal targets with strong themes. Combined with the change of overseas epidemic prevention attitude and MSD authorization, some people will understand it as “the end of covid-19”, and the decline of relevant thematic targets is naturally understandable. However, careful analysis shows that this is not the end of the epidemic, but should be understood as another stage of the development of the epidemic. In fact, the focus of global epidemic prevention is changing from overseas to China. In the future, assuming that Omicron has no worse variation (of course, there is no way to give an effective conclusion), the overseas epidemic prevention policy changes made after this round of Omicron (the United States, the United Kingdom, etc. are gradually relaxed), as China with the best global prevention and control, almost all the population has not been affected by Omicron, Considering the characteristics of Omicron and the recent sporadic epidemic situation in China, China will become the focus of global epidemic prevention. How to deal with the follow-up meeting will be a question we must consider and how to make epidemic prevention policies? How to treat covid-19 small molecule? How to treat epidemic prevention with integrated traditional Chinese and Western medicine? And so on will be the key. Later, what can pharmaceutical investment focus on? Covid-19 therapeutic drugs and supply chain, especially in China, should be paid attention to, which involves the anti epidemic of traditional Chinese medicine; Considering the policy environment this year, we should continue to pay attention to the investment of traditional Chinese medicine; In addition, considering today’s special macro environment, the target of low value and high growth will also be good.
III. Sector View: 1. Think from the dimension of several years: if pharmaceutical investment in the past 3-4 years paid more attention to “selecting the head company of the main track and enjoying valuation expansion”, and paid more attention to “individual stock cost performance under valuation digestion” in the second half of 2021, then in 2022, we should pay more attention to “the structural rhythm of the first small and the later large”, although they are structural opportunities, But its expression is different. Facing the short-term weakness of medicine, we have stretched our vision. What is the essence of the long-term growth of the pharmaceutical industry? It is the long-term pull of just demand for medicine and the long-term pull of health consumption upgrading, and the current demand satisfaction and penetration rate are very low, which is the most long-term logic of medicine. However, because we are worried about the reform policy of the payment end, we seem to ignore this essence. The payment end policy will not be the long-term logic restriction of a rigid industry, which is at most a medium-term and short-term interference item. In the medium and long term, we are optimistic. GDP growth is in the downward stage, the economic structure continues to adjust, while China Meheco Group Co.Ltd(600056) industry is in the early stage of growth, there is a reverse scissors gap, and the comparative advantage is strengthened. With the release of the population data of Qipu, China’s population structure is undergoing great changes. In the future, the development logic of many industries driven by the huge demographic dividend will face great changes. The market will pay more and more attention to and look for industries with comparative advantages of incremental attributes, The industry with long logical cycle and strong certainty ranks at the forefront of Medicine (the aging intensifies, the expansion of just needed medicine, the upgrading of health consumption intensifies, and the penetration rate of consumer medicine increases). In the future, the allocation funds of consumer medicine will strengthen the allocation of medicine from the medium and long-term dimension, resulting in the improvement of the overall water level of medicine, which is optimistic for the long term. The long-term 4 + X strategic thinking remains unchanged: the upgrading of pharmaceutical science and technology, pharmaceutical consumption, pharmaceutical manufacturing and pharmaceutical mode.
2. In the medium and short term: 2021 has experienced valuation digestion. For a period of time at the end of 2021, a round of market of traditional Chinese medicine, covid-19 line and small and medium market value seems to be declaring war on the values of the past five years. What is good? What is right? In fact, good or good, right or right, but the expression of the market in different stages is different. In fact, the industrial trend and industrial logic have not changed, but there will be periodic changes in the expression of valuation and position concentration. In this periodic change, the stock price will change with stages, and that’s all. At the present stage, if we follow the trend, we really need to grasp the rhythm. In 2022, we judge it as “small in the front and big in the back”.
3. Configuration idea:
Consumption upgrading: (1) selected traditional Chinese medicines: Zhejiang Jolly Pharmaceutical Co.Ltd(300181) , Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Shandong Buchang Pharmaceuticals Co.Ltd(603858) , Guiyang Xintian Pharmaceutical Co.Ltd(002873) , Jianmin Pharmaceutical Group Co.Ltd(600976) , Chongqing Taiji Industry (Group) Co.Ltd(600129) , Beijing Tongrentang Co.Ltd(600085) , Zhejiang Conba Pharmaceutical Co.Ltd(600572) , Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) , Henan Lingrui Pharmaceutical Co.Ltd(600285) , Hubei Jumpcan Pharmaceutical Co.Ltd(600566) . (2) Rehabilitation: Ningbo Sanxing Medical Electric Co.Ltd(601567) , Beijing Chieftain Control Engineering Technology Co.Ltd(300430) etc; (3) Vaccines: Chongqing Zhifei Biological Products Co.Ltd(300122) , Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) , Chengdu Olymvax Biopharmaceuticals Inc(688319) , Chengdu Kanghua Biological Products Co.Ltd(300841) ; (4) Ophthalmology: Shenyang Xingqi Pharmaceutical Co.Ltd(300573) , Shanghai Haohai Biological Technology Co.Ltd(688366) ;
Manufacturing upgrade: (1) biomedical upstream ( Tofflon Science And Technology Group Co.Ltd(300171) , Truking Technology Limited(300358) , Zhejiangtailin Bioengineering Co.Ltd(300813) , Focused Photonics (Hangzhou) Inc(300203) ) (2) differentiated cdmo ( Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Porton Pharma Solutions Ltd(300363) , Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) , Shanghai Medicilon Inc(688202) , Wuxi Apptec Co.Ltd(603259) , Pharmaron Beijing Co.Ltd(300759) , Pharmablock Sciences (Nanjing) Inc(300725) ) (3) API systematic upgrade ( Zhejiang Starry Pharmaceutical Co.Ltd(603520) ) (4) injection outlet ( Nanjing King-Friend Biochemical Pharmaceutical Co.Ltd(603707) , Hainan Poly Pharm.Co.Ltd(300630) )
Innovation Upgrading: (1) CGT ( Porton Pharma Solutions Ltd(300363) , Northland, Zhejiangtailin Bioengineering Co.Ltd(300813) ) (2) platform innovation recovery ( Jiangsu Hengrui Medicine Co.Ltd(600276) ) (3) innovation internationalization ( Shanghai Junshi Biosciences Co.Ltd(688180) ) (4) nuclear medicine ( Yantai Dongcheng Biochemicals Co.Ltd(002675) ).
Core repair: Chongqing Zhifei Biological Products Co.Ltd(300122) , Jiangsu Hengrui Medicine Co.Ltd(600276) , Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) , Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) , Aier Eye Hospital Group Co.Ltd(300015) , Wuxi Apptec Co.Ltd(603259) , Changchun High And New Technology Industries (Group) Inc(000661) .
Other long-term tracking and promising targets are: Novogene Co.Ltd(688315) {{ Novogene Co.Ltd(688315) , {{605186186} {{605186186} Inkon Life Technology Co.Ltd(300143) Pacific Shuanglin Bio-Pharmacy Co.Ltd(000403) {{{000538 { Yunnan Baiyao Group Co.Ltd(000538) {{ Yunnan Baiyao Group Co.Ltd(000538) {{ Yunnan Baiyao Group Co.Ltd(000538) {{ Yunnan Baiyao Group Co.Ltd(000538) {{ Yunnan Baiyao Group Co.Ltd(000538) {000538 8}} {{000538 8 8 8} {{68818189}, {{{6881818189} {} {6868688166}, Amoy Diagnostics Co.Ltd(300685) , { Intco Medical Technology Co.Ltd(300677) {{{{{{ Intco Medical Technology Co.Ltd(300677) {{{{{{{{{{{{{{{{60360388882}}, {{{{{{{{{{{{603603888}, Shenzhen Salubris Pharmaceuticals Co.Ltd(002294) Jiangsu Nhwa Pharmaceutical Co.Ltd(002262) , China biopharmaceutical, Zhejiang Wolwo Bio-Pharmaceutical Co.Ltd(300357) , Lepu Medical Technology (Beijing) Co.Ltd(300003) , Jointown Pharmaceutical Group Co.Ltd(600998) , Yifeng Pharmacy Chain Co.Ltd(603939) , Lbx Pharmacy Chain Joint Stock Company(603883) , Dashenlin Pharmaceutical Group Co.Ltd(603233) , Yixintang Pharmaceutical Group Co.Ltd(002727) , Joincare Pharmaceutical Group Industry Co.Ltd(600380) , Guangzhou Jet Bio-Filtration Co.Ltd(688026) , Shanghai Kindly Enterprises Development Group Co.Ltd(603987) , etc.
Risk tips: 1) negative policies continue to exceed expectations; 2) The growth rate of the industry is lower than expected; 3) There may be errors in assumptions or calculations.
