Due to the gradual optimization of domestic epidemic prevention policies, Hong Kong stocks have bottomed out and rebounded since October this year, and some pharmaceutical stocks have a bright trend.

Specifically, the demand for anti-epidemic drugs has greatly increased, stimulating Shandong Xinhua Pharmaceutical to rise 83% in the past 5 days, and Fusen Pharmaceutical and Tianda Pharmaceutical also rose by more than 30%. Biotechnology plate of Fangda Holdings, Fudan Zhangjiang, Junshi biology also performed better. Of course, many pharmaceutical stocks have fallen sharply so far this year.

Looking forward to 2023, a number of institutions are optimistic that the pharmaceutical industry will usher in valuation repair.

Everbright Securities: pay close attention to the three main lines of medical hard science and technology, traditional Chinese medicine and innovative pharmaceutical equipment.

Everbright Securities said that after more than a year of adjustment, the valuation of the pharmaceutical sector and institutional positions are at historic lows, the marginal relaxation of the overlay policy and the prominent value of long-term allocation.

The agency recommends that we pay close attention toMedical hard science and technology, traditional Chinese medicine, innovative medicine and equipmentThree main lines.

1. Medical hard technology plate involving domestic self-control and import substitution logic, such as high-end equipment, life science / pharmaceutical industry upstream, etc.

With the gradual development of new medical infrastructure, the acceleration of domestic substitution process, and the gradual landing of projects such as the construction of new hospitals, the renovation of old hospitals, the preliminary upgrading of medical equipment and prevention and treatment materials, it is expected that the policy will continue to benefit the process of domestic substitution in the medical hard technology industry, superimposing the demand for medical equipment in the rapid development of the clinical application market. We are optimistic about imaging equipment, sequencer, clinical mass spectrometry and domestic scientific research service industry.

2. Traditional Chinese medicine plate supported by policy

Everbright Securities judged that in 2023, the traditional Chinese medicine industry is expected to continue to benefit with the support of health insurance and policies, the inheritance and development of traditional Chinese medicine enterprises, the comprehensive embrace of the new national standard and market expansion by the traditional Chinese medicine formula granule industry, and the accelerated approval of innovative traditional Chinese medicine into health insurance, waiting for performance and value revaluation. It is recommended to pay attention to four types of traditional Chinese medicine investment opportunities: brand proprietary Chinese medicine, traditional Chinese medicine formula granules, traditional Chinese medicine innovation and traditional Chinese medicine diagnosis and treatment, including Chinese traditional medicine, Gusheng Hall and other stocks.

3. Differentiation / innovative equipment that can really meet the clinical needs.

At present, the core points to be grasped in stock selection and timing of innovative drugs include:

The main results are as follows: 1) it is in line with the policy and quality improvement guidance, has a unique high clinical value, can fill the clinical gap, or has a significant improvement compared with traditional treatments in terms of diseases with existing treatment plans.

2) cutting interest rates depends on the space, while raising interest rates depends on performance. Companies with large long-term space are preferred in the interest rate reduction cycle, and companies with solid short-term sales cash flow are preferred in the interest rate raising cycle.

Everbright Securities recommendation$REMEGEN-B (09995.HK)$、$Hinova Pharmaceuticals Inc. (688302.SH)$、$KEYMED BIO-B (02162.HK)$It is recommended to pay attention to$AKESO, INC. - B (09926.HK)$、$HUTCHMED (00013.HK)$、$Jiangsu Hengrui Pharmaceuticals (600276.SH)$、$INNOVENT BIO (01801.HK)$、$JUNSHI BIO (01877.HK)$、$BeiGene, Ltd. (06160.HK)$、$HENLIUS-B (02696.HK)$等。

Guoyuan Securities: the pharmaceutical sector is expected to usher in Davis double-click, optimistic about the four major tracks

Guoyuan Securities said valuations in the pharmaceutical sector were at their lowest level in nearly a decade. From the performance point of view, affected by the COVID-19 epidemic in 2022, the overall performance growth rate of the pharmaceutical sector declined, and it is expected that with the gradual alleviation of the epidemic in 2023, the performance is expected to hit bottom and rebound. From the point of view of the price reduction, the policy of the pharmaceutical industry is already at the bottom, and the mood is expected to be repaired step by step.

Generally speaking, the pharmaceutical sector is in the "policy bottom + performance floor + valuation floor". It is expected that the follow-up policy will continue to exceed expectations and continue to drive emotional repair. At the same time, with the gradual relief of the epidemic, the upward trend of the pharmaceutical industry in 2023 is remarkable. Performance is expected to recover quickly, is expected to usher in Davis double-click, Guoyuan Securities focus on bullishTraditional Chinese medicine, self-control, new medical infrastructure and consumer health careFour major tracks.

Shen Wanhongyuan: industry valuation is expected to be repaired step by step

Shen Wanhongyuan said that the overall volatility of Hong Kong stock pharmaceuticals in the past year is relatively large. With the optimization of domestic epidemic prevention policies, the decline in collection prices tends to be mild, and the industry valuation is expected to be repaired gradually.

In the context of the normalization of drug and consumable collection, policies such as dynamic adjustment of health insurance catalogue and superimposed priority review continue to encourage R & D innovation from drug review, approval and payment, and innovation has become the core driving force of enterprises. In addition, innovative pharmaceutical companies that have commercialized their products are expected to shift from biotech to biopharma in the future as their products are included in health insurance.

The institution is optimistic about the characteristic private medical service institutions ($Hygeia Healthcare Holdings (06078.HK)$、$Jinxin Fertility (01951.HK)$), it is recommended that you follow$GUSHENGTANG (02273.HK)$. In addition, biotech companies with innovative R & D capabilities are recommended ($AKESO, INC. - B (09926.HK)$、$REMEGEN-B (09995.HK)$、$InnoCare Pharma (688428.SH)$), and head CXO ($WUXI BIO (02269.HK)$）。

Puyin International: focus on cost-effective targets

Puyin International also believes that the current medical industry has a high performance-to-price ratio. Looking forward to 2023, combined with the characteristics of the current pharmaceutical sector, such as undervaluation, high growth, and the gradual return of institutional funds, the agency recommends that investors appropriately increase their risk appetite and gradually increase their positions in pharmaceutical stocks.

In 2023, focus on the policy positive, performance and valuation double rebound two major logic. Watch this.Innovative drugs (including biotechnology and pharmaceutical companies with strong innovative attributes), medical devices and traditional Chinese medicine / OTCDue to the high certainty of the subdivided track in policy changes and epidemic fluctuations, it is suggested that we should focus on the cost-effective targets.

The prospects for the main subdivision tracks are as follows:

Biotechnology:If not, dig the 1.5-line opportunity. The overall valuation of the 18A sector of Hong Kong stocks has been very attractive and remains optimistic about the long-term prospects of the industry, but the liquidity of the sector has not fully recovered in the short term and the industry pattern is still uncertain. Therefore, it is recommended to close the 1.5-line targets with abundant catalysts, strong execution and abundant liquidity / cash reserves in the short term, mainly Kangfang Biology, Nuocheng Jianhua, HUTCHMED (China) Limited, etc., and continue to recommend Rongchang Biology and Conoya for a long time.

Medical devices:Grasp the two main lines of medical equipment and innovative equipment. Discount loans continue to be issued around the country, boosting equipment demand. It is expected that manufacturers will focus on 4Q22/1H23 to enter relevant income, superimposed supervision to support the construction of designated hospitals, high certainty in the growth of the equipment sector, Mindray Medical is the first choice, and it is recommended to pay attention to more flexible minimally invasive robots, Qiming Medical, Xintong Medical and Peijia Medical.

Traditional Chinese medicine / OTC:The policy is good frequently and the fundamentals are strong. The attitude of policy support is clear, the impact of collection on the exclusive varieties, slices and formula particles of proprietary Chinese medicine is limited, while the performance growth of the core target is steady. It is suggested to pay attention to Jichuan Pharmaceutical Co., Ltd., Tongrentang National Medicine, China Resources Sanjiu, poinsettia and so on.

CXO:Keep a firm eye on the leader in the long run. The prosperity of the industry is still at a high level, but it is necessary to continuously observe the changes of the macroeconomic environment, the competition pattern and the financing environment of the biomedical industry. The agency believes that the industry leader Wuxi Biologics has the highest certainty in the above changes and can be configured on a machine-by-machine basis.

Pharmaceutical industry:Pay attention to the fundamental reversal trend. The defensive attribute of the plate is strong, but there are still policy risks. It is suggested to focus on the controllable impact of collective mining and the obvious improvement in fundamentals / continuation of strong targets. Continue to recommend Sino Biopharmaceutical, and suggest to focus on Xiansheng Pharmaceutical and CSPC Pharmaceutical.

Internet medical industry:The risk margin of pharmaceutical e-commerce policy is reduced. With the introduction of key regulatory provisions, the regulatory pattern of pharmaceutical e-commerce has roughly taken shape, the risk of continued tightening is more controllable, and the long-term growth potential is still worth looking forward to. It is recommended to pay attention to Alibaba Health Information Technology and JD Health.

Preferred target$AKESO, INC. - B (09926.HK)$、$INNOCARE-B (09969.HK)$、$HUTCHMED (00013.HK)$、$Shenzhen Mindray Bio-Medical Electronics (300760.SZ)$. The first three have a lot of pipeline development / sea catalysts to look forward to in the next 12 months, and the commercial strength has been preliminarily verified, with high short-term certainty and flexibility in valuation rebound. Mindray medical production line is perfect, is expected to fully enjoy the new medical infrastructure dividends and discount loan policy driven by part of the incremental demand.