Pharmaceutical biology, an industry regarded as a sunrise, has given birth to more than ten times as many shares in the secondary market. The head enterprise is favored by many institutional investors because of its sustained high growth. But in 2022, the performance of the pharmaceutical biology sector has disappointed many investors-it has been adjusted for 11 months since mid-2021.

In this year's unique environment, medicine has been labeled as "cognitive bias" by the market, and has been "pessimistic cognitive expectations in the transaction for a long time".

Looking to the future, does the medical unit still have a chance? Is this a good time to increase your position?

For the above problems, this paper collates the latest views of securities firms and professional institutions in order to help investors to judge.

Let's look down.

First, phased performance is the king.

Guosheng Securities analysts said that in the past four to five years, it was a pharmaceutical bull market, and investors paid more attention to "enjoying valuation expansion after selecting the head companies of the main track", and the second half of 2021 to 2022 was the process of the departure of the pharmaceutical bull market. Pay more attention to "the performance-to-price ratio of individual stocks in the state of valuation digestion".

Policy is a distractor, not a decision. in the long run, it is a deterministic comparative advantage after demand release and leaping aging. The long-term strategic thinking remains unchanged: the upgrading of medical science and technology, the upgrading of pharmaceutical consumption, the upgrading of pharmaceutical manufacturing, the upgrading of medical mode, and so on.

To have a clear understanding, we have entered a performance vacuum. Due to the impact of the epidemic, this year's performance cannot be derived linearly and needs to be carefully evaluated, and the valuation system cannot simply be compared with the bull market of the past three years. Phased performance is still king. Continue to look for structural opportunities from the bottom up.

Second, medical opportunities in Hong Kong stocks will come from innovative drugs and innovative medical devices.

Fan Jie, deputy director of the Qianhai open source fund investment and fund manager, said that judging from the current valuation level, the valuation level of most of the leading enterprises in the pharmaceutical sector has returned to a relatively reasonable range and has allocation value. The situation of some leading enterprises of consumption is also similar. I personally think that the performance of consumption in 2022 is likely to be a structural market, and the performance of the pharmaceutical sector in 2022 will be better than that in 2021. At the same time, investment will tend to be diversified, and it will be more a stock market than a board market.

There are relatively many high-quality pharmaceutical companies in Hong Kong stocks. Affected by market sentiment and the expectation of the Federal Reserve to raise interest rates in 2021, the Hong Kong stock pharmaceutical market also fell a lot in 2021. Now, the pessimistic expectations of the market may be fully reflected in the process of decline. In the pharmaceutical sector of Hong Kong stocks in 2022, I think the opportunity mainly comes from innovative drugs and innovative medical devices, of course, this requires in-depth research on individual stocks.

Pi Jinsong, manager of Chuangjin Hexin Healthcare Fund, said in an interview at the end of the first quarter that he was mainly optimistic about vaccines, medical devices, innovative drugs and related industrial chains. Being optimistic about vaccines is mainly because key vaccine companies are in the stage of releasing large varieties and releasing profits rapidly; being optimistic about medical devices is due to the significant improvement in the R & D and manufacturing capacity of domestic medical devices, driven by the dual promotion of market expansion and import substitution, the development speed is very fast; the proportion of domestic innovative drugs is on the low side, and there are many supporting policies.

The mRNA track is still a potential direction.

In addition, it has been two years since the COVID-19 epidemic broke out. How does the epidemic affect the long-term value of the pharmaceutical and biological industry? Which segments will benefit in the long run? Which plate eruptions will only be a flash in the pan? What types of companies are preferred by head agencies in the post-epidemic era?

In this regard, Yan Tao, vice president of Cornerstone Capital Investment, said that the sectors that directly benefited from COVID-19 's epidemic were IVD (In Vitro Dagnostic products) and vaccines.$Merck & Co Inc (MRK.US) $$GlaxoSmithKline PLC (GSK.US) $, small molecule CDMO (Contract Development and Manufacturing Organization, customized R & D and production organization), etc.

In the long run, the additional orders and income brought by COVID-19 will decrease and disappear. IVD enterprises and small molecule CDMO enterprises need to use the funds to expand their business types and regions, so as to digest high valuations and maintain performance growth; mRNA, a new track in the vaccine sector, is developing rapidly in China, despite facing challenges in technology, safety, application and other fields, it is still a very potential direction.

In addition to his direct impact on the business, COVID-19 has also reshaped the supply chain. During the epidemic period, foreign suppliers were greatly affected, and enterprises sought domestic substitution, which brought development opportunities to the upstream of IVD, vaccine and other industries. If the relevant enterprises can take advantage of the opportunity to achieve more key technologies to catch up and surpass, the future prospect can be expected.

Data show that the current management scale of Cornerstone Capital is more than 60 billion yuan, and has successfully invested in well-known pharmaceutical, biological and medical device enterprises, such as Mindray Medical Care, New Industry, Kellein, Huada Zhizhao and so on.

IV. Summary

To sum up, from the point of view of many institutions, the pharmaceutical sector will perform better in 2022 than in 2021, and the opportunity will mainly come from innovative drugs and innovative medical devices. In the meantime, the vaccine$Merck & Co Inc (MRK.US) $MRNA of the plate$Moderna Inc (MRNA.US) $The track is worthy of attention and is a direction with great potential.