Pay attention to the pharmaceutical market segment, and the fund focuses on investment opportunities for raw materials

2019-12-07 17:07:52

The new version of the medical insurance catalog has been released recently, and the pharmaceutical sector has caused another wave. Standing at the current point in time, how to grasp the investment opportunities in the pharmaceutical sector? Judging from what the reporter knows, a large number of imported original drugs have entered medical insurance by exchanging price for volume, which has intensified competition in the domestic pharmaceutical market. The institution believes that in the environment of price reduction pressure and a sharp decline in gross profit margin, cost control is very important. Raw material preparation companies have ushered in the layout opportunities, and some raw material companies have been sought after by the market recently.

Raw materials companies are sought after

Since mid-November, raw material pharmaceutical companies such as Tonghe Pharmaceutical (300636), Aoxiang Pharmaceutical (603229), Tianyu Co., Ltd. (300702) have been sought after in the market. In just over two weeks, Aoxiang Pharmaceutical's stock price rose by nearly 50%, Tonghe Pharmaceutical's stock price rose by about 30%, and Tianyu Co., Ltd. and Proluo Pharmaceutical (000739) hit record highs.

Judging from the institutional research, in the past month, Tonghe Pharmaceutical has received two batches of institutional investors' research. On November 1, Fu Weiqi, general manager of Rongtong Fund Research Department, and Huang Yirui, investment director of Xinhuali Capital, went to investigate; on November 26, Ye Feng, investment manager of Guotai Fund, went to investigate.

The issues that institutions are concerned about include the production capacity of listed companies, their subsequent product strategies, whether they intend to enter the formulation industry and the pricing ability of raw materials, etc. Tonghe Pharmaceutical revealed that the company is building a preparation project and will actively expand new varieties in the future. Currently, there are multiple new varieties under development in anticoagulation, anti-gout, anti-diabetes, dermatitis treatment, anemia treatment and other drugs.

It is worth noting that with the market's high popularity with the raw material sector, some companies began to rise sharply on the day they ushered in institutional research. Taking Tonghe Pharmaceutical as an example, after Cathay Fund went to conduct research on November 26, its stock price rose by 25% in just 4 trading days.

Many listed companies recently announced that their raw materials have passed the technical review. On November 29, Sailong Pharmaceutical (002898) announced that the company's tigecycline raw materials recently passed the technical review of the Drug Review Center of the State Drug Administration. On November 11, Menovar (603538) issued an announcement stating that the company has received relevant certificates for rosuvastatin calcium (raw substances) issued by the European Medicines Quality Administration. Xianju Pharmaceutical (002332) revealed on the interactive platform that some of the company's raw material products have obtained certification and registration from the United States, the European Union, Japan, etc. In the future, it will continue to explore the international high-end market and gradually increase the international standardized market share of raw material products.

Institutions are optimistic about long-term value

From an institutional perspective, Gu Ruofei, chairman of Panyao Asset, said that from the development trend of the pharmaceutical industry, after imported original drugs entered medical insurance, domestic pharmaceutical companies have forced to promote innovation, but there is still suspense whether they can withstand the impact of international giants. After pharmaceutical companies have changed from a hotbed in the past to a battlefield, controlling the cost of raw materials has become crucial.

"From the perspective of raw materials, we admit that there is a gap between domestic and imports, but for some mainstream varieties, the quality of domestic products is comparable to that of Europe and the United States, while the price of imported auxiliary materials is more than twice that of domestic products. As a medical sub-sector that has always been neglected, raw materials are expected to expand their market share with the dividends of centralized procurement price reduction policy, and replicate the domestic substitute import path after drugs and devices." Gu Ruofei analyzed.

Cheng Zhou, star fund manager of Cathay Fund, believes that driven by factors such as pharmaceutical regulatory policies and industry development trends, China's raw materials may usher in a golden period of development, and the industry has a lot of room for development, which can last at least 5 to 10 years. In Cheng Zhou's view, both cyclical and supply-demand factors and policy aspects have significantly benefited the characteristic raw materials.

"According to the new consistency evaluation standards, related approval is required. If the raw material pharmaceutical company is replaced, it needs to be re-applied, and the voice of the raw material pharmaceutical company will be enhanced," Cheng Zhou explained.

It is understood that after the implementation of the new volume-based procurement regulations, the pricing model of raw materials has also changed. In the past, as raw material suppliers of preparation factories, the cost-added statutory pricing was usually used. As the pricing rights of raw material pharmaceutical companies increased, the pricing was changed to a profit sharing model, and raw material pharmaceutical companies had a lot of room for profit elasticity.

Chen Heng, fund manager of Huashang New Power, is also optimistic about the raw material pharmaceutical sector, especially high-end characteristic raw material pharmaceutical companies. In his opinion, some domestic characteristic raw material pharmaceutical companies have international competitiveness, with a large growth space on the demand side and a steady growth rate; the supply side is subject to environmental protection factors, certification thresholds, and process barriers. The production capacity has been cleared in recent years, the competitive environment has been improved, and investment opportunities are worth paying attention to.