This year, the pharmaceutical sector can be described as "brilliant", with the pharmaceutical index leading a number of industries. In terms of segmentation, the sub-industries with the best growth rates in 2020 include medical devices, bio-pharmaceuticals, chemical raw materials, etc., and the leader of each sub-industry is "Hengqiang". Up to now, is the pharmaceutical sector worth waiting for for a long time? In this issue of "Niu Tao", Fu Tu invited Mr. Castrol Niu GE to answer your questions in the studio.

Mr. Niu GE answered several questions that everyone is most concerned about, such as approval, or have other views, welcome more comments!

The bull market of the pharmaceutical industry this year has superimposed the epidemic factors of COVID-19, but it also stems from the risk aversion attribute of the industry and the internal factors of the policy cycle.

Castrol Niu Song:The bull market of the pharmaceutical industry started at the beginning of 2019.。After 18 years of small gains and the killing of longevity vaccines, medical examinations, mass purchases and other events in the second half of the year, the pharmaceutical industry fell to a low valuation at the beginning of 19 years, and then started a bull market.

From January 2019 to today, the entire pharmaceutical sector has risen by about 110%, ranking fifth. The first place is food and beverage, and the third to fourth is military industry and consumer service. On the whole, people feel that the increase will be more obvious than the existing increase, and the bull market will be more intense.

This rally is caused by a number of factors:

Macroscopically, the pharmaceutical industry has experienced the attention of the party and the state to the capital industry and the innovative industry.

Factor disturbance of external environment，The pharmaceutical industry has the attribute of risk aversion.。The low market risk preference caused objectively by the Sino-US trade war and the COVID-19 epidemic, while the pharmaceutical industry has the traditional risk aversion attribute of "drinking and taking medicine", so it is sought after and is good for vaccines, testing, traditional Chinese medicine, protective equipment and other sectors.

The protective effect of the policy cycle on the pharmaceutical industry。The policy cycle of the past two years, including our innovative reform, the reform of the health insurance system, and so on, has accelerated the development of the industry. The pharmaceutical industry, especially drugs and devices, is essentially a manufacturing industry, and product-driven disposal is very obvious. In the past, the drug approval cycle was very long, with the drug examination reform, innovative drugs and innovative devices were approved at an accelerated pace. High-quality enterprises have the basis for rapid growth in performance, which brings opportunities for the pharmaceutical industry, and also gives birth to the development of some so-called "water sellers" such as CRO, CMO, CSO and so on.

FundsThe orientation in the market is obvious.。One is the institution, the other is foreign investment, the capital pays close attention to the growth and value of the long-term plate, so we can see the pursuit of the pharmaceutical industry before. Judging from the increase in the ranking, medicine does not show a strong bull market this time. This is because there is a relatively obvious structural transformation in the plate. So far this year, we can see medical targets that have increased by more than 800%, and medical targets that have fallen by more than 50%. The differentiation of the overall plate is very obvious. Relatively speaking, the traditional pharmaceutical targets with greater policy pressure do not perform very well.

The factors of COVID-19 's epidemic situation are superimposed this year.。At present, looking at the medical semiannual report and the quarterly report, not all sectors are very good. Related to COVID-19 's testing, protection and other business plate increased significantly, the performance is also very good. Follow-up vaccine will probably be the largest increment of the plate.

The recent medical pullback is large.The valuation of hot targets takes two or three years to digest; investorsShould be selected more carefully，Seek long-term opportunities for layout innovation and growth

Castrol Niu Song: the recent medical performance is relatively weak, the basic callback around 10:00. According to Citic statistics, stocks that have risen more in the previous period have been adjusted back to 30%. This is also a pullback when the overall increase in medicine this year is more than 60% Murray and 70%. From the point of view of the industry, there is no obvious bad signal for the time being, or unfavorable information for the enterprise appears.

HowViewing the Pharmaceutical Industry from the thinking of growth stocks? There are more expectations for long-term performance, valuation, etc., the first three financial statements, the balance sheet is relatively more important, and need to pay attention to the progress of clinical research and development. The impact of short-term performance weighting is relatively small. After all, some targets like Science and Technology Innovation Board this year have neither income nor profit.

In the case of high growth of enterprises，Long-term valuation is faster to digest. The problem now is，Some companies have very good long-term growth, but basically the valuation may be 3. 5%-It takes five years to have a relatively reasonable position.But there are still some opportunities that may be overdue, long-term growth opportunities persist, and more energy needs to be spent on selection.

Strategic Analysis Framework of Pharmaceutical Industry

Castrol Niu Song:First，我Tend to look at the long-term growth of corporate layout from a growth point of view：Companies can digest short-term valuations through long-term performance growth，If it can exceed expectations,SureDigest valuations faster.This angle.The fault tolerance rate is high, and the rate of return will be more obvious.

For example, we expect 30% to 50% growth, but in high-quality management and a better industry environment, the company may achieve 70% and 80% growth, and its share price will naturally rise significantly.

The pharmaceutical industry is an industry with no shortage of growth, including pharmaceuticals、Instrument、Services, even the retail industryThese four platesAll have relatively strong growth.Different medical plates apply different research methods.

Pharmaceutical industryPharmaceuticals is an obvious product-driven industry, and the volume of blockbuster products means that the performance of companies can exceed expectations in the next few years, so the timing is the listing progress of blockbuster products, including clinical progress. and the volume of sales after listing. Pharmaceutical companies can have leaders of hundreds of billions of dollars or even more than 200 billion dollars, and there are also familiar pharmaceutical companies overseas, so there is more room for market capitalization in the long run.

Equipment industryCompared with pharmaceuticals, equipment is a smaller and more beautiful industry because its plates are more subdivided and more complex. For example, an orthopedics department is divided into spine, joint, and trauma, and even a stent is divided into different components. If an enterprise has a better variety of innovation, there is a great opportunity for an enterprise that has grown from billions to an actual profit of 30 billion market capitalization. With the development of varieties, the process of replacing imports and the support of medical insurance are also easy to sell. However, it is very difficult for equipment enterprises to become large enterprises with a market capitalization of hundreds of billions, which requires the expansion of varieties, mergers and acquisitions and so on.

service tradeThe industry has been sound for a long time and its cash flow is very good. Because there is no so-called popular style products, the growth of enterprises in this section is slower and the cycle is longer. From the perspective of the research framework, instruments and drugs are more variety-driven, and people pay more attention to the release time of the variety, while the service pays more attention to its brand strength and management ability, which is reflected in its revenue, profit margin and sales cost. as well as the layout of the track and other characteristics, such as ophthalmology, dentistry, tumor and so on have different characteristics.

Drugstore industryThere are different models in drugstores, and the elements of retail convenience stores are different from those of large merchants. As for the framework of traditional Chinese medicine consumer goods and food and beverage is relatively consistent, the rise and fall and rhythm are also consistent with the situation of food and beverage, so we can look at it from a simple consumer stock point of view.

Niu you @ Mafia asked: why is the pullback of the vaccine plate relatively large?

Because it went up too much in the early stage.。From the earliest rise in the target of the core vaccine, followed by speculation to some very marginal targets, such as some vaccine stocks in the early clinical stage or even the preclinical stage, to some subdivided chemical components in cold-chain vaccine adjuvants, and then to the bottle and transportation of the vaccine, many of which are not highly profitable and have nothing to do with the vaccine.

I thinkThe next step will beThe trend of relative differentiation.High-quality leading vaccine can be distributed, because the COVID-19 epidemic is still continuing, but it is still difficult to strictly control overseas, vaccine is the best way to control the epidemic at present. From our follow-up information, the vaccine may be delivered domestically as soon as this year. In a word, we are optimistic about the vaccine targets with technical support and strong logical support.

The recent domestic substitution of imported medical equipment and instruments is a very clear process. Therefore, there is policy support, and some enterprises also have the ability to import substitution, soAt least in the next three or five years.将Continue to rise。

Niuyou @ Crazy Tonight: how long will the mode of contract manufacturing for foreign capital last?

CMO and CRO models can compare manufacturing horizontally. The OEM of the domestic pharmaceutical industry is in the early stage of development, and the internationalization of China's pharmaceutical industry has just begun in recent years. According to the data of the domestic Ministry of Commerce and some overseas statistics, we can see that with the fermentation of the epidemic, investment in the pharmaceutical industry is increasing. thereforeI think the industry prosperity of CMO or CRO can be maintained.At least for a year or two。

Niu you @ Carroll: are you optimistic about anticancer drugs? Will there be a big pullback in anti-cancer drugs?

A: this time should be the outbreak of anticancer drugs.PeriodSeveral factors: from the review of the FDA, innovative drugs are basically tumor drugs; people's purchasing power has been reached; anti-cancer treatments are changing with each passing day, including the rise of immune drugs such as PD-1. In 2019, the American Association of Physicians revised its guidelines for the diagnosis and treatment of cancer tumors nine times, proving that this sector is in the stage of vigorous development.

Niu you @ Battle Mushroom question: will personal medical expenses go up?

答：It depends on the different needs of individual paid medical care. People's demand for medical care is unlimited, and everyone wants to live for a long time, so this demand is on the rise. The above-average personal medical needs are solved by personal payment, which is in line with the value orientation of health insurance policy, especially for cosmetic needs and high-end medical needs, and some individuals are willing to pay more. However, taking into account the needs of the broad masses of people, the coverage of health insurance will continue to increase, so there will be no significant increase in the cost of seeing a doctor.

Niu you @ icahnqi asked: the concentration of health care in the United States is very high, will the market share of domestic medicine leaders increase?

We believe that the market share of domestic medicine will indeed increase, and our country will still cultivate a world-class pharmaceutical leader. I have always had a strong confidence in this. Drugs are global varieties, and if drugs can cure diseases, they must be sold globally.

Hero Niu you @ Morgan asked: how to analyze the subdivision of the entire pharmaceutical industry?

The pharmaceutical industry is divided into manufacturing attributes and service attributes.. Manufacturing attributes include pharmaceuticals, including chemical drugs, biological drugs, APIs, traditional Chinese medicines, and instruments. Service attributes include drugstore retail, medical services, third-party testing laboratories and so on.

On the whole, the growth rate of our national drug market has been at a high level in the past two years. The equipment sector will grow faster, with some subsectors growing by more than 30%. In terms of service attributes, each segment is different, but with the listing of several leading enterprises, they basically represent the growth of the industry.

Niu you @ A Li Mei asked: is it reliable to buy medicine online recently?

Due to the epidemic this year, there has been a relatively great development in buying drugs online. The stock selection of some drugstores has increased several times. I think it is still reliable for OTC drugs, including many O2O will be picked up by pharmacies and delivered to their homes in the future.

Niu you @ 17961729 question: how to choose R & D stocks?

Research and Development UnitThe focus is on the progress of the enterprise's variety research and development, its target or drug targeting the population, and whether its efficacy is better than others. There is no profit, no revenue, relying solely on this R & D environment to support the research is quite difficult, for individual investors need a strong background knowledge. Therefore, overseas investment is mainly a portfolio investment, not just a few targets.