The Zhitong Finance App learned that Pioneer Securities released a research report saying that due to more scientific collection rules, after the collection gradually covered a large stock of generic drugs/high-value consumables, the performance was clear, and new performance growth points were formed after innovative products were launched one after another, and the drugs/device-related companies in the hospital will usher in a new growth cycle after their performance stabilizes. However, after the recovery of in-hospital diagnosis and treatment after the epidemic, demand for related equipment/consumables increased, overseas primary market investment and financing took the lead in stabilizing, and the expansion of new demand for peptides and ADC drugs drove the CDMO business into a new growth channel. The bank believes that after macroeconomic stabilization, it will drive a recovery in consumer and medical demand, the risks in various segments of the pharmaceutical industry have been fully released, and that the valuation of the pharmaceutical industry is expected to see a steady recovery in the future.
The views of Capital Securities are as follows:
The valuation of the pharmaceutical industry has experienced a long downward cycle in the past 3 years. The bank believes that it is mainly due to certain fluctuations in the external policies/business environment, industry sentiment, and company business cycle of various segments. The bank believes that due to more scientific collection rules, after collection gradually covers large stocks of generic drugs/high-value consumables, the performance is clear, and innovative products form a new performance growth point after being launched one after another. After stabilizing, the performance of in-hospital drugs/device-related companies will usher in a new growth cycle; demand for related equipment/consumables will increase after the recovery of in-hospital diagnosis and treatment after the epidemic; overseas first-level market investment and financing rates have stabilized. The expansion of new demand for peptides and ADC drugs will drive the CDMO business into a new growth channel; after macroeconomic stabilization, medical consumer demand recovery will drive the recovery of pharmaceutical consumer demand The risks in every segment of the industry are already It has been fully released, and the valuation of the pharmaceutical industry is expected to rise steadily in the future.
The bank reviewed and predicted the performance of leading companies in the pharmaceutical industry. Compared with 2019 to 2021, the profit growth rate of leading companies in the industry declined in the next 3 years (reflected in a decrease in the number of high-growth companies), but the steady increase in profit growth (reflected in an increase in the number of companies with medium performance growth rates), and the decline in industry valuations already reflected expectations of a slowdown in performance growth ahead of time. By analyzing the health insurance balance and balance ratio, the bank believes that health insurance spending is highly sustainable and stable and is expected to maintain steady growth over the long term, becoming the core driving force supporting the growth of pharmaceuticals/devices/equipment in the pharmaceutical industry, especially in serious medical scenarios. By reviewing the medical expenses of Japanese citizens and the GDP growth rate over the years, the bank believes that although the center of GDP growth has declined after China's economy enters a stage of high-quality development, the pharmaceutical industry is still expected to grow significantly higher than the GDP growth rate due to the certainty of demand, and has a great comparative advantage over other industries where long-term demand is at its peak.
After analyzing the popularity of various segments of the pharmaceutical industry, the bank believes that after the pharmaceutical industry as a whole enters a stage of high-quality development, industries/companies with definitive and continuous performance growth are more scarce, and are also expected to bring continuous steady returns (overall valuations are low, and stable performance growth can ensure that later valuations do not continue to shrink drastically, and can be driven by performance growth; on the other hand, industries/companies with marginal improvements in prosperity or inflection points are all upward flexible in terms of valuation/performance. From a deterministic perspective, the bank suggests focusing on inflection point targets in the innovative drug, blood products, endoscopy/rehabilitation equipment industry and medical service industry that have entered the commercialization stage; from the perspective of marginal improvements or inflection point expectations, the bank suggests focusing on leading CXO, upstream life science reagents/consumables companies that actively expand overseas markets, and disposable gloves.