On November 16, Hong Kong pharmaceutical stocks continued to rise, with Rongchang biology, Alibaba Health Information Technology, JD Health, clover biology, Kangfang biology and so on rising one after another.

A few days ago, the National Health Commission and other three departments jointly issued the 14th five-year Plan for National Health Informatization. The Plan encourages and guides the development of "Internet + Medical and Health" and Health Medical big data. Medical and health, as a long slope snow track, is also gradually warming up with the "policy warming + valuation bottom + emotional bottom".Soochow Securities pointed out that scientific and accurate prevention and control of the epidemic will be the trend, conducive to macroeconomic recovery, conducive to healthy medical recovery.

In addition, the Comprehensive Group of Joint Prevention and Control Mechanism of the State Council issued the Circular on further optimizing COVID-19 epidemic Prevention and Control measures scientifically and accurately and doing a good job in prevention and control work, announcing 20 measures to further optimize prevention and control work. It has further driven the domestic epidemic prevention and control policy expectations to change to an optimistic direction, and market confidence has been significantly repaired.

To thisGuojin Securities pointed out thatThe policy of optimizing prevention and control has been released, and we are optimistic about the three major directions of recovery, CXO and epidemic prevention and control.On the other hand, liquidity expectations in overseas markets improved this week, pharmaceutical innovation growth market sentiment recovered, overseas biotech and CRO stocks rose sharply. Focus on global liquidity expected to improve innovative drugs and investment opportunities at the bottom of the CXO sector (especially Hong Kong stocks).

The details are as follows:

Pharmaceutical sector:

The epidemic situation has a certain negative impact on the introduction of new innovative drugs into hospital, in-hospital diagnosis and treatment, and the progress of clinical trials in pipeline research. According to the three quarterly reports, affected by the logistics caused by the epidemic, the promotion and sales of new drugs in hospital, the overall performance of the industry as a whole bottomed out in the second quarter, slowly recovered in the third quarter, the overall trend was determined to be good, and the recovery was continuing.

In the context of the continued marginal recovery of the policy, we will pay attention to the national health insurance negotiations in the fourth quarter, as well as the accelerated commercialization of new varieties next year. There has been continuous progress in global pharmaceutical innovation, focusing on the progress of pipeline research and development. It is suggested that we should pay attention to the following four directions: the valuation repair of leading pharmaceutical companies, the continuous progress of innovative Biotech research and development, the opportunity for enterprises at the bottom of valuation to reverse and proprietary Chinese medicine (especially innovative traditional Chinese medicine).

CXO plate:

Clinical CRO plate, the epidemic situation has a certain negative impact on the development of hospital-side clinical trials, after watching the continuous recovery of related business.

According to the three quarterly reports in China, the orders and performance of the CXO sector (especially the leading enterprises) continued to exceed expectations. Most companies had high order growth, full production schedule, high performance growth and strong certainty of future growth. At present, plate valuation and market sentiment are at the bottom of history, and we are optimistic that the valuation of CXO plate will continue to repair. We will continue to focus on comprehensive leading enterprises and sub-sector leaders with international competitiveness and domestic market advantages.

The direction of epidemic prevention and control is still worthy of key attention:

Guojin Securities believes that there are still structural opportunities in the direction of cold and antipyretic analgesic drugs, COVID-19 specific drugs, COVID-19 vaccines, and antigen testing, and pay attention to the progress of related product research and development.

The advanced manufacturing direction of medicine continues to pay attention to the raw material medicine plate and the upstream supply chain of medicine, especially the acceleration process of domestic substitution in the direction of scientific instruments (catalyzed by discount policy).

Suggested attention: Hengrui Pharmaceutical, Wuxi Biologics, Pharmaron Beijing Co., Ltd.*, Wuxi Apptec, Yiling Pharmaceutical, etc.