The Federal Reserve decided to keep interest rates unchanged at its December interest rate meeting and is expected to cut interest rates in the future. Looking back at the experience of the end of interest rate hikes and the beginning of interest rate cuts over the past few decades, we can find that the market usually opens at this time**, and Hong Kong stocks, which are more sensitive to overseas liquidity, tend to lead. From the fundamental dimension, under the medium and long-term boom trend of new demand for large single products, superimposed with loose liquidity, Hong Kong Stock Connect medicine may benefitRelated products: Hong Kong Stock Connect Pharmaceutical ETF (**513200, connection**A C: 018557 018558).
The Federal Reserve has paused interest rate hikes, and overseas liquidity has improved, which is good for the investment and financing environment for innovative drugs
The Federal Reserve's latest monetary policy meeting results show that it decided to maintain 525% to 5The benchmark overnight borrowing rate range of 5% was unchanged, while the dot plot released hinted at three rate cuts next year. Affected by this, the improvement of overseas liquidity is conducive to the investment and financing environment of innovative drugs, and the related innovative drug sector of Hong Kong stocks rose significantly on December 14. If the follow-up interest rate cut is expected to be further implemented, the pharmaceutical sector, especially the liquidity-sensitive Hong Kong stock pharmaceutical sector, may continue to benefit.
Innovation has entered a new stage of cashing, and domestic drugs have global competitiveness
From 2023 onwards, China's innovative drugs have entered a new stage of cashing: 1) licensing out innovative drug projects and amounts have reached a new high, various molecular forms have been used overseas, and China's early-stage R&D projects of innovative drugs have been internationally recognized2) Innovative products have been approved by the FDA in the United States, and the R&D projects of Chinese pharmaceutical companies have been internationally recognized for addressing unmet clinical needs, and the quality of clinical trials has been recognized3) The global sales of marketed varieties have reached a new high, and the value of domestic high-quality drugs has been realized, which can reflect the global competitiveness of domestic drugs.
"New demand for large single products" is an important pharmaceutical product trend, and internationalization has ushered in an expected inflection point
Domestic pharmaceutical companies will enter a new round of innovative product cycle after PD-1 antibodies. In recent years, domestic pharmaceutical companies have continued to increase investment in innovation, and a number of high-quality innovative drug pipelines with clinical value have been commercialized one after another, and the product structure of the domestic pharmaceutical industry has been continuously improved, and this improvement is expected to accelerate in the next few years. The new round of product cycle will be diversified and internationalized, and is expected to last longer, and domestic pharmaceutical companies will also enter a new round of growth stage.
The overall valuation of Hong Kong stocks is lower than that of A-shares and overseas pharmaceuticals
The median valuation of Hong Kong-listed pharmaceutical companies is 15 times PE in 23 years and 13 times PE in 24 yearsThe median valuation of A-share pharmaceutical companies is 29 times PE in 23 years and 23 times PE in 24 yearsThe median valuation of overseas pharmaceutical companies is 20x PE in 23 years and 18x PE in 24 years.
From the perspective of the current downward trend in U.S. bond interest rates, the elasticity of Hong Kong stocks is relatively higher, and pharmaceuticals are the most sensitive to the decline in U.S. bond interest rates 018557 018558
The content and data are for reference only and do not constitute investment advice. AI technology strategy is provided for Youlian Cloud.