Pharmaceutical and Biological Industry Weekly Report: Medical services and medical devices have long-term investment

Recent industry and company information review

It is reported that in the relevant draft documents issued by the National Development and Reform Commission to the provinces, there are 890 varieties of dosage forms included in the list of low-cost drugs, for these varieties, the National Development and Reform Commission plans to cancel the original maximum retail price formulated by the government. Instead, it is limited to the daily use cost (i.e., less than 3 yuan for chemical drugs and less than 5 yuan for proprietary Chinese drugs), and the production enterprise will set its own price according to the cost and market conditions within the range, and report to the regional price authorities for the record.

2, Shenzhen will cancel the second selection of drugs, broaden the distribution of basic drugs following the cancellation of drug addition last year, Shenzhen recently decided to cancel the "second selection" of drugs. Yesterday, Shenzhen Health, Population and Family Planning Commission held the city's drug administration and sunshine drug work meeting. At the meeting, it was proposed that from now on, Shenzhen will no longer implement the "second selection" of drugs, and cancel the supplementary drug varieties outside the national and provincial basic drug catalogs.

3, there are rises and falls and insurance, the National Development and Reform Commission brewing to adjust the price of Chinese medicine program It is reported that the National Development and Reform Commission is brewing to adjust the price of Chinese medicine, is expected to be introduced early next year. The object of price adjustment is the proprietary Chinese medicines that are non-national essential medicines within the range of government pricing, and the prices of proprietary Chinese medicines that enter the national essential medicines will be studied separately. At present, there are 2,595 Chinese patent medicine manufacturers in China. The price adjustment plan of "up, down and guaranteed" encourages the production of low-cost drugs to meet market demand, and enterprises with a large number of exclusive varieties of traditional Chinese medicine will be affected, such as Yiling Pharmaceutical, Tongrentang, Kangyuan Pharmaceutical or will face a decline in profits.

4, 104 medical device industry standards issued large enterprises will profit CFDA recently issued 104 medical device industry standards, of which 31 mandatory standards, 73 recommended standards. This is the first time since the establishment of the State Food and Drug Administration to issue medical device standards. The industry standards issued by the State Food and Drug Administration can rectify the market and also protect the interests of large medical device enterprises.

Last week's market review

Last week, the pharmaceutical and biological sector fell 2.91% in a week, outperforming the market. Six sub-industry sectors all fell, of which the medical services and medical devices sector due to lock income and adjustment, the decline is relatively large, down 14.43% and 8.90% in a week, respectively, other sectors, biological products sector fell 2.87%, chemical pharmaceutical sector fell 2.03%, Chinese medicine fell 1.43%, pharmaceutical business fell 1.32%. In terms of individual stocks, Shanghai Laiss, Baiyunshan, Asia Pacific Pharmaceutical, Furui Shares, Hansen Pharmaceutical, Purple Light Ancient Han, East China Pharmaceutical, Tongren Tang, etc. rose the most, while David Medical, Baowright, Dean Diagnostics, Libang Instrument, Tiger Pharmaceutical and other companies fell the most. At present, the valuation of TTM in the pharmaceutical and biological sector is 35 times, the dynamic valuation is 31 times, and the valuation premium rate of all 300(excluding financial services) is 142%, and the valuation has rebounded.

Investment View of the Week

After the pharmaceutical sector continued to pull back under a series of bearish stimulus in the early stage, the overall valuation pressure has been eased. With the resumption of IPO, the introduction of a list of low-cost drugs, policies to encourage social capital to set up health services and other favorable events, the pharmaceutical sector, especially the sector dominated by medical services and traditional Chinese medicine, once again ushered in investment opportunities, we insist that the pharmaceutical sector has long-term investment value, and we recommend that we continue to pay attention to the theme of medical services marked by private hospitals and the concept of state-owned enterprise reform Stocks, with exclusive varieties of traditional Chinese medicine and some stocks with high transfer concept. In terms of stock pool, it is recommended to pay attention to Tasly, Yunnan Baiyao, East China Medicine, Double egret Pharmaceutical and other industry leaders, and recently it is recommended to pay attention to Renfu Pharmaceutical, China Pharmaceutical, Fosun Pharmaceutical, Qianhong Pharmaceutical, Qianjin Pharmaceutical and other individual stocks.