According to the Futubull Financial App, Sinolink Securities has released a research report stating that in the first half of 2024, listed companies in the pharmaceutical sector have overcome various unfavorable factors and maintained stable growth overall. Among them, the pharmaceutical sector has shown outstanding performance, with innovative drugs, generic drugs, and some biological products all showing bright spots in terms of performance; at the same time, some biological products, medical devices, medical services and consumer healthcare, traditional Chinese medicine, and pharmaceutical retail sectors have been relatively under pressure. Looking ahead to the second half of the year, with the decline in the base, the recovery of purchasing activity, and the stabilization of policy expectations, we are optimistic about the recovery of demand for pharmaceutical and medical device products within hospitals and the improvement of performance in the pharmaceutical sector.

Sinolink Securities' main points are as follows:

In the pharmaceutical sector, although the growth rate has declined, the revenue of A-share and Hong Kong-listed pharmaceutical-related companies included in the statistics still achieved stable growth. In the second quarter of 2024, the revenue growth of the biopharmaceutical sector was particularly outstanding, with some biotech companies significantly reducing losses and showing a high level of prosperity; the chemical medicine sector also had many bright spots, with many companies achieving rapid growth.

Innovation remains one of the strongest driving forces in the pharmaceutical industry. In the current medical insurance environment, innovation can bring pricing advantages, reduce cost control risks, and drive rapid growth in corporate revenue and profits. In addition, it should be noted that since the second quarter of 2024, the active pharmaceutical ingredient industry has shown elasticity in terms of volume and price, with multiple varieties such as antibiotic intermediates and vitamins showing improvement in elasticity. It is recommended to continue to pay attention to the changes in the prosperity of varieties in the active pharmaceutical ingredient sector and grasp them from the bottom up.

In terms of investment strategy in the pharmaceutical sector, taking into account the overall performance trend of the semi-annual report, the standardized governance of the domestic medical order, and policies supporting the entire chain of the innovative drug industry, we are particularly bullish on high-volume hot spot varieties: continuing to be bullish on the GLP-1 and peptide industry chain; mapping the U.S. stock market and leading targets for overseas expansion: being bullish on targets with strong innovation and potential heavyweight varieties in the European and American markets; risk-resistant leaders: in the current global economic environment, companies with better technology, management, compliance control capabilities, and stronger financial reserves will effectively reduce the risks of pharmaceutical research and development and operations.

Medical devices and equipment: The demand for equipment purchases was under pressure in the first half of the year, but the growth trend is expected to gradually recover in the future. In the first half of the year, medical device procurement activities were delayed due to a general wait-and-see attitude, but leading medical device companies have increased their efforts to expand and layout in overseas markets, contributing to additional growth support in the domestic market under pressure.

In the future, the competitive advantage of leading companies will be more prominent in a more transparent and standardized procurement environment. At the same time, the issuance progress of long-term special treasury bonds and local government special bonds to support equipment renewal projects is accelerating, and the growth trend of China's medical instruments and equipment sector is expected to gradually recover.

Biological products: differentiated performance on the track, focusing on strong growth varieties. According to the different life cycles of core varieties, long-acting interferon and other high-growth large single products have seen a rapid increase in sales volume, and the performance of related companies has been particularly impressive compared to the overall performance of the sector; albumin and intermediate propanol demand has been stable and upward for a long time, and the overall performance of blood products companies in the first half of the year has achieved steady growth; objective changes in public health policies and market environment have caused short-term performance pressure on some enterprises. It is recommended to continue to pay attention to long-acting interferon and other large single products in the rapid growth period, as well as leading blood products companies with plasma source advantages.

Traditional Chinese medicine and pharmacy: affected by high base number, expected to see recovery growth in the second half of the year. In the first half of 2024, the performance was under pressure due to the impact of the high base number. In the outpatient direction, the large channel specifications are clearer and the price control ability is stronger. After the impact of the high base number factors, the second half of the year is expected to achieve steady growth. In the inpatient direction, under the improvement and expansion of centralized procurement, it is optimistic about the continued increase in sales volume of exclusive varieties through centralized procurement. The performance of pharmacies is under short-term pressure, and due to changes in the external environment, the industry may undergo consolidation in the future, and the concentration is expected to increase. It is recommended to continue to pay attention to leading companies with excellent operating quality and good cash flow.

Medical services and consumer healthcare: performance under short-term pressure, bullish on long-term development space. At the medical service end, in the first half of 2024, inpatient diagnosis and treatment activities recovered slowly, reflected in the performance, the income of many medical service companies remained resilient. At the same time, due to the rapid expansion phase of some medical service institutions, the profit side is slightly under pressure. In the long-term dimension, internal and external expansion is expected to continue to contribute incremental growth to the companies. In the consumer healthcare end, due to the high base and short-term changes in the consumption environment, the overall performance of the sector in the first half of 2024 was slightly under pressure but still resilient. It is expected that in the future, with the continuous enrichment of the industry's supply side, market demand will be further released.

Upstream of the pharmaceutical industry: continuous innovation by companies, waiting for the turning point of business cycles. With the improvement of the monetary environment and investment and financing environment in the future, the performance of upstream pharmaceutical companies is expected to gradually recover.

Investment advice: In the second half of the year, the core investment opportunities in the pharmaceutical sector will still focus on inpatient demand. It is recommended to pay close attention to the clinical progress and overseas authorization breakthroughs of innovative drugs, as well as the performance recovery of existing medical equipment in the second half of the year. Key targets: Xiamen Amoytop Biotech (688278.SH), Humanwell Healthcare (600079.SH), Kelunbotai Biotech-B (06990), Innovent Bio (01801), Shenzhen New Industries Biomedical Engineering (300832.SZ), etc.

Risk warning: sales falling short of expectations, risk of medical insurance price reduction and cost control policies exceeding expectations, risk of exchange rates for overseas businesses and geopolitical risks, risk of research and development clinical data falling short of expectations, risk of consumer healthcare business cycle falling short of expectations, etc.