Key investment points:
Current market review
In the current period (1.15 – 1.22), the Shanghai Composite Index closed at 3522.57, up 0.04%; The CSI 300 index closed at 4779.31, up 1.11%; SME 100 closed at 9457.65, up 0.05%; In the current period, Shenwan pharmaceutical and biological industry index closed at 10395.03, down 7.19%, ranking 31st among Shenwan’s 31 primary industry indexes. The seven secondary sectors all outperformed the Shanghai Composite Index, CSI 300 and SME 100.
Important information
On January 19, Guangdong Pharmaceutical Trading Center issued an announcement to carry out centralized procurement of blood products, large infusion, exclusive varieties and non exclusive varieties in 276 pharmaceutical alliance regions, which is also the largest and most diversified provincial alliance collection so far. Affected by the news of centralized purchase, the share price of Changchun High And New Technology Industries (Group) Inc(000661) fell by the limit on the 19th, and Anhui Anke Biotechnology (Group)Co.Ltd(300009) also fell by more than 7%. The strategy of the Guangdong provincial centralized purchase alliance provides ideas for the national centralized purchase of Chinese patent medicine, blood products, large infusion and other commonly used clinical drugs.
On January 20, the medicines patent pool (MPP) announced that it had signed agreements with 27 generic drug companies to allow them to produce and supply molnupiravir, an oral anti covid-19 virus drug of methadone, for 105 low – and middle-income countries or regions around the world. Five Chinese pharmaceutical enterprises have been shortlisted in the agreement list, namely: Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) , Brightgene Bio-Medical Technology Co.Ltd(688166) , Shijiazhuang Longze pharmaceutical, Shanghai Desano and Langhua pharmaceutical.
On January 20, the State Food and Drug Administration issued the drug approval certificate. A total of 10 varieties and 13 products in this batch pass / are deemed to pass the consistency evaluation. Among them, the two first imitations and the first evaluated products are Jiangsu Hengrui Medicine Co.Ltd(600276) nimodipine oral solution and Beijing Hanmei amlodipine losartan potassium tablets (I).
Core view
In the current period, Shenwan pharmaceutical and biological industry index closed at 10395.03, down 7.19%, ranking 31st among Shenwan’s 31 primary industry indexes. The seven secondary sectors all outperformed the Shanghai Composite Index, CSI 300 and SME 100.
In terms of the epidemic situation, as of January 21, the number of new confirmed cases in the world was still increasing on the original basis, with more than 3 million new cases in a single day. China faces the dual challenges of the import of delta and Omicron strains. Although the local epidemic situation in some areas can be effectively controlled in a short time on the whole, the Spring Festival transportation is about to begin, the winter (Paralympic) Olympic Games is about to open, the number of inbound personnel and the flow of personnel are increasing, and China still faces great pressure of “external defense input and internal defense rebound”. In terms of covid-19 vaccination, covid-19 vaccination has made steady progress. According to the data of China’s National Health Commission, as of January 21, China had received a total of 2.961 billion doses of covid-19 virus vaccine. In the short to medium term, there is still great uncertainty about the global spread of the epidemic. Therefore, it is necessary to continue to pay attention to the investment opportunities of covid-19 prevention and control industry chain, including covid-19 oral drugs, vaccines and antibodies, as well as the listed companies deeply involved in covid-19 prevention and control drug supply chain.
In terms of news, on January 19, Guangdong Pharmaceutical Trading Center issued an announcement to carry out a provincial alliance collection with the largest scale and most varieties so far, involving 276 drugs such as blood products, large infusion, exclusive varieties and non exclusive varieties. In this centralized collection, blood products entered the scope of volume procurement for the first time, specifically involving five varieties of intravenous injection of human immunoglobulin (pH4), human immunoglobulin, human coagulation factor VIII, human fibrinogen and human albumin. In addition, recombinant human growth hormone, which has attracted much attention from the outside world, was also included in the centralized collection for the first time, which had a certain impact on relevant companies. On January 20, local time, the medicines patent pool (MPP) announced that it had signed agreements with 27 generic pharmaceutical enterprises to allow them to produce and supply molnupiravir, an oral anti covid-19 virus drug of MSD, for 105 low-income countries or regions around the world. Five Chinese pharmaceutical enterprises were shortlisted in the agreement list, namely Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) , Brightgene Bio-Medical Technology Co.Ltd(688166) , Shijiazhuang Longze pharmaceutical The release of patents of Shanghai desaino, Langhua pharmaceutical and covid-19 therapeutic drugs has had a great impact on vaccines, masks and testing sectors.
For the CXO sector with more market attention, it had been at a high level of valuation premium for a long time. After December, due to the storm of entity list, sector rotation and changes in market style, the overall correction was significant. At the current time point, the absolute valuation of CXO sector is still high, but it is in a relatively low valuation quantile as a whole. From the perspective of sector driving force, CXO industry relies on order driven, with strong performance certainty and predictability, with a distinct label of growth stocks. With the performance cashing and growth digestion, growth and valuation will further dynamically match under different market styles. On the other hand, due to the active covid-19 treatment industry chain driven by the continuous outbreak of the global epidemic driven by the Omicron variant, some high-quality enterprises deeply involved in covid-19 industry chain outsourcing services are also expected to maintain a high boom. In the long run, compared with other countries, the supply chain system of China’s CXO industry has been gradually improved in recent years, with obvious comparative advantages in labor cost, production efficiency and operation efficiency, which will be further expanded in the international environment of covid-19 epidemic; Under the environment of China US game and China’s full implementation of independent and controllable, the development of CXO industry serving innovative drugs and its industrial chain will also be an inevitable trend. It is suggested to continue to pay attention to the industry leaders with global competitiveness and second-line blue chips with cost performance and high safety margin in CXO sector.
From the outbreak of the traditional Chinese medicine sector to the active covid-19 detection and treatment industry chain driven by the continuous outbreak of the global epidemic driven by the Omicron variant, the pharmaceutical industry continued its point to area structural recovery. With the expected start of interest rate increase in the United States and other overseas countries and the arrival of a new round of stable growth cycle in China, the overall market maintains a volatile trend. The market focus may focus on the sectors with undervalued repair and high demand confirmation logic. It is suggested to pay attention to the undervalued sectors in the pharmaceutical industry structurally, and the growth and valuation will quickly and dynamically match to a reasonable range in a period of time. At the time point when the valuation switching is gradually approaching, the advance layout needs to pay particular attention to the marginal improvement and the sustainability of growth. In the long run, the pharmaceutical industry is currently at a historical low valuation. With the continuous promotion of the procurement of drugs and consumables, enterprises with relatively high safety margin, strong innovation ability, rich product pipelines and good competition pattern are expected to continue to benefit in the long cycle. It is suggested to focus on the industrial chain of innovative new drugs, high-end medical devices, medical consumption terminals and biological products, Meanwhile, second tier blue chips with relatively low valuation shall be excavated:
1) innovative drugs and innovative drug industry chain, including comprehensive and specialized innovative drug enterprises and CXO industry. It is suggested to pay attention to Jiangsu Hengrui Medicine Co.Ltd(600276) , Jiangsu Nhwa Pharmaceutical Co.Ltd(002262) , Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) , Wuxi Apptec Co.Ltd(603259) , Hangzhou Tigermed Consulting Co.Ltd(300347) , Pharmaron Beijing Co.Ltd(300759) and Apeloa Pharmaceutical Co.Ltd(000739) ;
2) it is recommended to pay attention to Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) and Lepu Medical Technology (Beijing) Co.Ltd(300003) for the leading high-end medical devices with outstanding import substitution ability;
3) for medical consumption terminals benefiting from the increased market concentration, it is recommended to pay attention to Yixintang Pharmaceutical Group Co.Ltd(002727) , Yifeng Pharmacy Chain Co.Ltd(603939) and Dian Diagnostics Group Co.Ltd(300244) ;
4) biological products enterprises with scarcity and consumption attributes, including Changchun High And New Technology Industries (Group) Inc(000661) , Hualan Biological Engineering Inc(002007) , Cansino Biologics Inc(688185) – U and Pacific Shuanglin Bio-Pharmacy Co.Ltd(000403) .
Risk warning: covid-19 epidemic fluctuation risk
