Pharmaceutical and biological industry review report: collection policy intensive introduction waiting for market sentiment to calm down.

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Pharmaceutical Week View: The collection policy is intensively introduced, waiting for market sentiment to calm down.

Recently, the pharmaceutical industry collection policy intensive introduction. On August 18, the "National Organization Insulin Centralized Procurement Plan (Draft for Comment)" was released. The specific time schedule is to start related work in September and implement it in early 2022. Local collection, joint mining policy has also been introduced, Guangdong 16 provinces joint mining, Anhui IVD reagent collection, 5 categories of 23 kinds of clinical testing reagents to open centralized band procurement, the main sub-areas in the chemical light-emitting IVD.

Insulin national policy is relatively mild, when domestic substitution is carried out.Novo Nordisk,SanofiandLillyInternational giants such as China's current insulin market share of 80%, domestic market share of only about 20%. Domestic insulin has a price advantage over imported products, domestic enterprises short board in the insulin product line combination, terminal coverage, etc., but withTonghua Dongbao,Ganli PharmaceuticalAspart pre-mixed insulin products gradually approved for listing, terminal channel coverage continues to expand, we believe that the country to take advantage of the east wind, is expected to accelerate the domestic substitution of insulin.

Anhui IVD reagent collection, short-term impact on the market is greater, but we think the market may overreact. First, Anhui IVD reagent collection is more similar to sunshine procurement, and adopts bargaining mode instead of bidding mode. Second, there are still high unreasonable costs in the circulation of IVD reagents, and the ex-factory price of IVD reagents has a large discount to dealers (30% or 40%, etc.); Third, domestic reagents are generally 20-30% cheaper than imported reagents, and the price reduction required for domestic reagents is smaller under the same winning bid; fourth, the IVD field of domestic substitution space is vast, chemical luminescence field "Royasibei" accounted for 80% of China's market, domestic instruments and reagents have price advantages, collection is conducive to the rapid realization of domestic substitution.

Market Review: This week the biopharmaceutical sector rose slightly, the weekly increase ranked 23rd in all SW first-class industries, this year, pharmaceutical biology rose 7.71 percent, outperformed.Shanghai and Shenzhen 300The index is 5.60 percentage points, ranking eighth in all SW Tier 1 industries.

In the sub-sector, the pharmaceutical and biological sub-sector fell across the board this week. So far this year, chemical raw materials and traditional Chinese medicine have been the best performers, up 11.67 per cent and 3.80 per cent, respectively, while chemical preparations are the weakest performing sub-sector, down 26.13 per cent. Chemical agents (-26.13%), pharmaceutical commerce (-19.95%) and medical devices (-13.96%) run-through pharmaceutical biology (SW) industry index.

In terms of individual stock performance, the top five stocks that rose last week were:Chutian Technology(24.67%)、Xinhua Medical(20.10 percent), ST Baihua (17.50 percent), * ST Hengkang (13.09 percent) andHaier Biology(11.17 percent). The top five decliners were:South Micro Medicine(-24.11%)、Mindray Medical(-23.79%)、Wanfu Creatures(-19.47%)、Guangyuyuan(-18.90 per cent) andKellein(-18.26%)。

Valuation: This week's valuation showed a downward trend, as of Friday (August 20), pharmaceutical biology (SW) industry-wide PE(TTM)34.3 times, PB(LF)4.36 times.