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中银基金郑宁:看好医药行业反转 院内产品端公司尤其是创新药值得关注

Bank of China Fund Zheng Ning: Optimistic about the pharmaceutical industry's reversal, in-hospital product-side companies, especially innovative drugs, are worth paying attention to

Zhitong Finance ·  11/07/2023 10:45

Recently, Bank of China Fund Zheng Ning said in an in-depth interview that in the next rise in the pharmaceutical industry, the hospital's product-side companies, especially innovative drugs, are expected to take the lead.

The Zhitong Finance app learned that recently, Bank of China Fund Zheng Ning said in an in-depth interview thatIn the next rise in the pharmaceutical industry, in-hospital product-side companies, especially innovative drugs, are expected to take the lead.Although the pharmaceutical index declined this year, the experience was much better than last year. There was a general decline in pharmaceuticals last year, and there were no opportunities driven by industrial logic; unlike this year, there may be structural opportunities. For example, in-hospital standards, represented by innovative drugs, had significant excess profits this year.

Zheng Ning pointed out that for the pharmaceutical industry to come out, the most important thing is fundamental support. From the beginning of the fourth quarter of last year to the third quarter of this year, the performance of pharmaceutical companies has been at a low base. In the future, many companies will experience consecutive quarterly improvements in performance over many quarters. Comparing the entire industry, pharmaceutical performance has a comparative advantage. In particular, some in-hospital product-side companies will have a stronger fundamental comparative advantage, and their current valuations are also relatively low.

In the current pharmaceutical sector, Zheng Ning believes that the fundamentals may be upward. Valuations have become very cheap, and the congestion of institutional holdings has declined sharply, and the policy side may have turned positive.All four of the industry beta scoring factors are getting better, so we need to stay optimistic now.

Zheng Ning said,The logic of investing in innovative drugs is in eight words: three ends resonate, and the report is fulfilled. First, the stage of investment in innovative drugs and themes in previous years is already different, as evidenced by real improvements in financial statements. Today's innovative drugs are no longer at the stage of using PPT to tell stories, but there have been significant changes in financial statements.

Second, the demand side, supply side, and payment side resonated on the three sides. On the demand side, the market size of innovative drugs has always been growing rapidly.

Both internal and external factors on the supply side of innovative drugs are changing.In terms of internal factors, the supply side may have made a difference; it is no longer as internal as it was a few years ago. In terms of external factors, the approval of new drugs is not as relaxed as in previous years, limiting the supply of new products. More importantly, after going through the cycle of the past few years, it is also clear which are the leading innovative drug companies, and the industry pattern has improved markedly.Today, the growth of this group of leading innovative drug companies is relatively certain, and the implied return is also relatively high. It may be a relatively good time to invest in innovative drugs in recent years.

Also, the payment side is improving.On the one hand, the health insurance negotiation rules have been continuously optimized since last year, the price reduction has narrowed, and continued to be relaxed this year. On the other hand, the current policy is also encouraging diversified payment systems, and it is worth looking forward to more incentive policies on the payment side in the future.

The combination of the above aspects has brought about improvements in financial statements. As can be seen from the fundamentals of innovative pharmaceutical companies that we have observed, the revenue of these companies is growing rapidly, gross margin is increasing, and the sales expenses ratio and R&D expense ratio are falling, leading to an increase in net interest rates. In the next few years, as profit growth exceeds revenue growth, a number of innovative pharmaceutical companies are expected to start making profits.

In addition to innovative drugs, Zheng Ning is also quite optimisticInnovative devices and autonomous and controllable devicesThese two directions are more of a logic of import substitution. For example, the share of domestic production of electrophysiological surgery is very low, and the penetration rate of domestic surgery is also very low. At the same time, the barriers to this industry are also very high, so these domestic enterprises may have very high room for revenue expansion in the next few years.

Looking at endoscopes in autonomous and controllable equipment, the share of domestic production is also very low, but the penetration rate of this industry is not as low as electrophysiology, so the growth rate of the industry is not that fast, but in the future, domestic companies will have good room to increase their income by replacing imports, and there is even a logic of going overseas in the future.

Zheng Ning admits that his investment framework is quite reverse. At the bottom and top of the industry, the characteristics of the portfolio will be clearly different from others.When the industry is at the bottom, he will focus on high-risk assets. When the industry reaches the top, his portfolio will focus on low-risk assets again. It may seem that the form of portfolios has changed a lot, but in fact, the essence remains the same; their risk-return ratio is the best in its class.

This is because at the bottom of the industry, the risk-return ratio of growth stocks will be relatively good, and the sharpness of the portfolio will be very strong. By the time we reach the top, the risk-return ratio of growth stocks is reduced, we may choose value stocks, and this combination will slow down again.It doesn't make much sense to look for assets without risk at the bottom.Even high-dividend assets that are popular today are risky. When we invest, the most important thing is to compare the risk-return ratio. Zheng Ning said that they are pursuing long-term investments, hoping that the portfolio will continue to bring in excess profits. Through one capital market cycle after another, the longer it takes, the higher our excess earnings will be.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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