According to wind statistics, the net inflow of pharmaceutical ETFs in the past four days was 103.3 billion yuan, with a single-day net inflow of 39.3 billion yuan. Tianhong Hang Seng Shanghai-Shenzhen-Hong Kong Innovative Drug Select 50 ETF (517380) has a net inflow of 581 in the past four days380,000 yuan.
As of midday on December 13, A-shares** were lower, and the Shanghai Composite Index fell 048% was reported at 2989 points, and the Shenzhen Component Index fell 073%, the GEM index fell 09%, the Beijing Stock Exchange 50 Index rose 392%。The pharmaceutical industry bucked the trend, the concept of virus prevention and control rose, and the drug rose first. Zhejiang Zhenyuan, Nanjing Pharmaceutical, Jinan High-tech, Jinling Pharmaceutical, Shapu Aisi, Tuoxin Pharmaceutical, Baili Tianheng-u, New Ganjiang, Datang Pharmaceutical, etc. rose sharply.
Hang Seng CSI-Shenzhen-Hong Kong Innovative Drugs 50 Index (HSSSHID.).Hi) bottomed out after the opening. As of midday, more than half of its constituent stocks**. Nuotai Biotechnology and Changshan Pharmaceutical led the gains, respectively. 03%, and other ** have followed suit.
**The Economic Work Conference was held in Beijing on December 11-12. The meeting demanded that next year, we should persist in seeking progress while maintaining stability, promoting stability through progress, establishing first and then breaking down, and come up with more policies that are conducive to stabilizing expectations, growth, and employment, and actively forging ahead in changing the mode, adjusting the structure, improving quality, and increasing efficiency, so as to continuously consolidate the foundation for stability and improvement. It is necessary to strengthen the counter-cyclical and cross-cyclical adjustment of macroeconomic policies, continue to implement a proactive fiscal policy and a prudent monetary policy, and strengthen the innovation and coordination of policy tools. According to this study, it is recommended to observe the marginal improvement of demand along the three "supply side" clues, and the growth and recovery varieties of supply clearance + marginal recovery of demand can be configured, such as consumer electronics chain, semiconductor design, innovative drugs, robots, etc.
In addition, at the press conference of the National Health Insurance Administration held today, it was once again clear that it will vigorously support the development of innovative drugs. As of the end of October this year, the cumulative expenditure of negotiated drugs and medical insurance during the agreement period has reached 244.7 billion yuan, driving the sales of related drugs to 354 billion yuan. In terms of supporting innovation, the following measures have been taken: First, a dynamic adjustment mechanism for the medical insurance catalogue adapted to the access of new drugs has been established, and a dynamic adjustment mechanism for the catalogue has been established once a year, shortening the adjustment cycle from the original maximum of 8 years to one year. Second, the inclusion of innovative drugs in the medical insurance catalogue has been given policy preferences, and the success rate of negotiations this year is as high as 92%. Third, the rules for negotiation and renewal to support the development of innovative drugs have been improved, and stable expectations have been given.
The valuation of innovative drugs is repaired, and the investment value is highlighted
The pharmaceutical industry has restarted after a round of adjustment cycle. From the perspective of market capacity, innovation going overseas has entered a new stage of cashing, and the overseas market space is broad.
The Hang Seng Shanghai-Shenzhen-Hong Kong Innovative Drugs 50 Index is published by Hang Seng Indexes Company, which includes 50 innovative pharmaceuticals listed in Shanghai, Shenzhen and Hong Kong, with relatively high R&D investment and relatively good momentum performance**, aiming to track leading companies that promote the development of innovative drugs. At present, the valuation of the index is at a historically low level, the investment value is prominent, and the profit is considerable.
Fundamentally, the rigid demand and strong growth attributes of the innovative drug sector determine the certainty of medium and long-term performance and the high elasticity of explosive growth driven by single products. In recent years, the performance of the overall medical listed companies has risen, and the net profit attributable to the parent company has been consistent in the past two years, with a growth rate of more than 27%. In terms of payment space, the draft of the new opinions on the national procurement negotiation has a clear attitude towards supporting innovation such as the increase in the payment ceiling of exclusive varietiesIn terms of overseas capabilities, with the approval of innovative drugs such as BeiGene, Junshi Biosciences and Chi-Med in the EU or the United States, a new chapter in the history of Chinese pharmaceutical companies of Bio-Thera has also opened a new chapter in the history of Chinese pharmaceutical companies entering the European and American markets.
In terms of valuation, the negative factors of foreign liquidity that the new drug sector had previously suffered turned into positive factors, pushing up the valuation of the entire pharmaceutical sector to partially recover. And because most of the unprofitable biopharmaceutical companies that are at the forefront of innovation and have the highest growth potential are listed on the Hong Kong stock market, the valuation center of the growth sector of Hong Kong stocks is significantly negatively affected by the international liquidity of the US dollar interest rate hike cycle.
The short-term pressure on the pharmaceutical sector has been lifted. On the other hand, reviewing the history**, it can be seen that from the end of 2018 to the middle of 2021, the pharmaceutical sector has experienced a round of unilateral *** for nearly three years, and has since experienced a unilateral downward trend for two and a half years. At present, although it has passed the bottom of the stock price and the bottom of industrial operation, it is still at the bottom of the valuation, and it is very cheap from various observation angles such as price-earnings ratio, price-to-book ratio, and price-to-sales ratio.
According to the opinion of China Merchants **, the geopolitical risks that previously suppressed the valuation of innovative drugs, the pressure of national negotiations on centralized procurement and the questioning of the ability to go overseas have also been basically released or resolved. The national centralized procurement has reached the ninth batch, and the impact on the head large varieties has basically landed. Recently, the original and macromolecular biosimilars of pharmaceutical companies such as BeiGene, Junshi, Hutchison and Bio-Thera have also been approved by the US Food and Drug Administration (FDA) for marketing, and the first step of Chinese pharmaceutical companies to go overseas has been successful. At present, the domestic pharmaceutical sector is in a new upward cycle in which valuation, performance, and future space are all resonating upward, and it is one of the tracks where investors can obtain better returns.
Tianhong Hang Seng Shanghai-Shenzhen-Hong Kong Innovative Drugs Select 50 ETF (517380)**Manager He Yuxuan:At present, it will be the starting point of a new round of medicine. Compared with the whole market, medicine is still not priced correctly;From the bottom up, the vast majority of large and medium-sized enterprises in the pharmaceutical industry have very excellent cost performance;From the perspective of industry comparison, no matter from the perspective of industry fundamentals or valuation level, medicine should be an investment choice that is difficult to miss. At present, it is recommended to focus on large and medium-sized innovative pharmaceutical companies, which have the opportunity to purchase product rights at a discount from small enterprises, rapidly expand their product lines, and amplify their own commercialization capabilities due to their relatively abundant cash flow. **Medicine is still a track with great potential. Pay attention to the Hang Seng Shanghai-Shenzhen-Hong Kong Innovative Drugs Select 50 ETF Connection**A(014564) C(014565).
Risk Warning: The objective display of index constituents in this article is not intended as a recommendation. Please read the legal documents of the product carefully before purchasing, and choose the product that suits you. The market is risky, and investors need to be cautious. **Can invest in Hong Kong Stock Connect targets**, you need to bear the unique risks caused by the differences in investment environment, investment targets, market systems and trading rules under the Hong Kong Stock Connect mechanism.
*: Tianhong**.
Disclaimer: This article is ** content, does not represent the position of this magazine, and does not constitute investment advice.