CITIC Construction Investment released a research report saying that the innovative pharmaceutical industry is expected to achieve good growth in 2024, and is optimistic about the sector's performance.
The Zhitong Finance App learned that CITIC Construction Investment released a research report stating that it is expected that the innovative pharmaceutical industry is expected to achieve good growth in 2024 and is optimistic about the sector's performance. Policy outlook: Purify the environment, raise standards, encourage innovation, and push the industry back to basics to achieve high-quality development; Industry outlook: ① Domestic demand is expected to grow moderately when demand-side determination and policy expectations are stable; ② as the global competitiveness of China's innovative drugs increases, overseas travel is expected to continue to be an important main line; ③ Generic drug collection is gradually being cleared up, and innovation and transformation continues to advance. Increased valuation of systematic pharmaceutical companies: As stock products are cleared, incremental innovative products enter the harvest period, and industry ecology is reshaped, the bank focuses on systematized pharmaceutical companies entering the harvest period.
CITIC Construction Investment's main views are as follows:
What is the bank optimistic about in the future:
The main line of innovation: the best way to get through the cycle. Global liquidity is expected to improve marginally, which is beneficial to the pricing of innovative assets; national policies encourage the development of innovative pharmaceutical devices; and new technologies drive the rapid development of the industry. Typical industry segments are innovative drug and pharmaceutical companies. Among them, evaluation of differentiation, clinical value, compliance commercialization ability, or platform capability is the core basis for stock selection.
Main line of going overseas: reasonable expectations, leading companies should pay a premium. In the long run, the pharmaceutical industry is expected to break out of large global companies, but investors also need to fully anticipate the challenges posed by going overseas. This must be a long-term process. Representative industry segments are innovative drug and device companies. Evaluating the international competitiveness of the company's products and teams is the core basis for stock selection. Currently, companies with strong competitiveness should be given higher premiums.
Improving the main line: Grasp the pace of changes in business climate. ① The CXO industry has been fully adjusted in the early stages, and the recovery in global investment and financing is expected to drive a gradual recovery in global customer demand; ② a high-value consumables company that gradually clears up collection and gradually builds up new business capabilities.
Main line of undervaluation: choose cost-effective companies. ① Traditional Chinese medicine: leading OTC brand and leading innovative Chinese medicine enterprise; ② leading pharmacy chain; ③ vaccine leader with strong commercialization and product selection capabilities; ④ pharmaceutical distribution and comprehensive pharmaceutical enterprise.
Other main lines: medical services; leading medical treatment and traditional Chinese medicine. Hong Kong stock market review: Pharmaceuticals overall outperformed the market this week, and biopharmaceuticals and medical devices performed well. Hang Seng Healthcare rose 7.07% this week, the Hang Seng Index rose 4.33%, and Hang Seng Healthcare overall outperformed the market by 2.74%. Since 2023, Hang Seng Healthcare has outperformed the market overall by 10.70%. In terms of sub-sectors, the biopharmaceuticals (+8.33%) and medical devices (+7.48%) sub-industries performed well this week.
A-share market review: Pharmaceuticals overall outperformed the market this week, and vaccines and IVD performed well. This week, the pharmaceutical index rose by 2.31%, the Wandequan A index rose 2.62%, and the overall pharmaceutical index outperformed the market by 0.31%. Since 2023, the overall pharmaceutical index has outperformed the market by 1.86%. In terms of sub-sectors, the vaccine (+7.76%) and IVD (+5.18%) sub-industries performed well this week.
Risk warning: industry policy risk, risk of R&D falling short of expectations, risk of falling short of expectations in approval, risk of macro-environmental fluctuations, etc.