Pharmaceutical industry chain and investment logic full comb analysis
Pharmaceutical and medical industry as a head effect is obvious, the performance of fine molecule industry varies from track, investors want to select individual stocks to invest in the difficulty can not be small. Ordinary investors can borrow funds layout. I hereby organize the pharmaceutical industry chain and investment logic of the whole comb, for your reference, I hope you have gained in the reading process!
In the pharmaceutical industry, raw materials, chemical preparations and other production enterprises belong to the upper reaches; medicine wholesale class and other medical circulation through the enterprise belongs to the intermediary; medical institutions downstream of the terminal belongs to the pharmaceutical sales terminal industry. There are eight major segments,
Main investment logic and investment opportunities
1, Chinese medicine
Chinese medicine plate includes two sub-industries of Chinese medicine tablets and proprietary Chinese medicine. Chinese medicine tablets refers to the Chinese herbal medicine and its processing of artillery products; Chinese medicine tablets is an important raw material for Chinese medicine. The price and quality of Chinese herbal medicines are related to the manufacturing cost and quality of pCms. The term "proprietary Chinese medicine" refers to medicines made from processed or extracted Chinese medicines that can be used directly for disease prevention and treatment.
To look at a company's profitability, two indicators are of major concern: gross profit margin and return on net assets (non-deductible weighted). The highest gross profit margin for a proprietary Chinese medicine company can be up to 90%, much higher than for an herbal medicine company.
The basic logic of the existence of subsectors: Chinese medicine tablets industry is a long history of the industry, China's traditional Chinese medicine from ancient times to the development of so many years has also cultivated a wide range of doctors and audience groups. Chinese medicine tablets itself is very earth, earth to dig out the herbs from the ground to wash and sunshine can be used, there is a strong agricultural properties, of course, now there is also a very modern cleaning, slicing, drying and other equipment. This industry is a mixed bag, with the cheapest panax ginseng and panax quinquefolium, as well as staggeringly expensive cordyceps, saffron and other valuable herbs. Due to the broad mass base, there is naturally a large market space.
The typical companies inside the sub-sector: ST Comet, China Traditional Chinese Medicine, Red Sun Pharmaceutical; Yunnan Baiyao, Pientzehuang, Baiyunshan, etc..
Direction of development and investment opportunities: modernization and standardization of processing of Chinese medicine tablets is the trend, at present to meet the listing standards of the pure first echelon of Chinese medicine tablets enterprises are also still preparing to seek listing. With the listing of the first echelon of large enterprises, it will usher in a variety of acquisitions and mergers.
2, chemical drugs
Chemical pharmaceutical plate is divided into two sub-sectors of chemical APIs and chemical preparations.
Chemical API refers to the raw materials used in the manufacture of a variety of chemical preparations of drugs, including medicinal powders, crystals and extracts. Chemical APIs can be specifically subdivided into bulk APIs and specialty APIs.
Chemical preparations refer to pharmaceutical preparations directly used in human disease prevention and diagnosis, including tablets, capsules, drops, ointments, powders and solvents.
Currently China's chemical pharmaceutical companies in the business model is relatively low-end, each year to Europe, the United States and Japan and other countries to export a large number of vitamins, antibiotics, antipyretic and analgesic class of bulk raw materials; at the same time, there are many pharmaceutical companies in China in the field of more lucrative speciality raw materials, such as the provision of Priligy and sartan class of Huahai Pharmaceuticals.
The typical companies inside the sub-sector: Hengrui Medicine, Fosun Pharmaceuticals, Coren Pharmaceuticals, Kanghong Pharmaceuticals, Lizhu Group, Beida Pharmaceuticals, Yifan Pharmaceuticals and so on.
Direction of development and investment opportunities: Innovative drugs have large capital investment (billions of dollars), a long cycle (10 years to start), and a low success rate (less than 10%), but the market space and strong demand.
3, biopharmaceutical
Biological biochemical products refers to the use of biotechnology and animal and plant materials for production, mainly including vaccines, blood products, in vitro diagnostics, recombinant proteins and other biological products.
The vaccine industry is equivalent to early prevention, which can save the country a lot of medical costs while preventing diseases. The vaccine industry is very similar to innovative drugs, don't look at the dynamic valuation, but at how many new drugs and vaccines companies have on hand. The barriers in this area are relatively high, and the exclusivity of the market will be maintained for quite a long time after the drug comes out. So we will see that some companies that can produce products tend to turn out to be good companies that are reliable in the long run. For some high-end biopharmaceuticals, the investment will be very large, such as investing in a monoclonal antibody, whether it is to take the path of innovative drugs or biosimilars, without more than five hundred million dollars in cash investment, I am afraid that it is difficult to build up the factory, and do the clinical. This piece of relatively favorable to large enterprises, small enterprises simply can not afford to invest this money.
Typical companies inside the industry: Hualan Bio, Tiantan Bio, Zhifei Bio, Kangtai Bio, Changchun Hi-Tech and so on.
Involved in the index: China Securities Biomedical Index, China Securities Biomedical Index, etc..
4, medical devices
Medical equipment is an indispensable part of the diagnosis and treatment of diseases, representative of diagnostic imaging equipment, orthopedic and implantable medical devices, small to infusion injection, large to open the belly need medical equipment, due to the close proximity to the clinic, but also an important value-creation link in the industry chain.
The typical companies in the industry: Myriad Medical, Fish Leap Medical, etc.
Development direction and investment opportunities: In the context of the downturn of the pharmaceutical companies, the overall situation of the domestic medical equipment enterprises is relatively better, on the one hand, because most of the hospitals and equipment-related charges in accordance with the charges for the service, in the context of the removal of the reform of the drug to support the medical service itself for hospitals appears to be more important, with diagnostics, on behalf of the medical device manufacturers, as the first step in the development of the medical equipment industry. On the one hand, because hospitals and device-related charges are mostly based on service charges, medical service itself becomes more important for hospitals in the context of the reform of removing drugs to feed doctors, the proportion and absolute amount of income represented by diagnosis in hospitals are rising; on the other hand, domestic device manufacturers are encouraged by the policy to substitute for imported devices, and the bidding of some grass-roots hospitals has been explicitly exempted from the imported devices. In this context, domestic devices and consumables are sought after by investment institutions, especially the higher technology content of the devices and high-value consumables.
Involved indices: CSI Medical Index, CSI Precision Medicine Theme Index, CSI Internet Healthcare Theme Index, etc.
5, pharmaceutical wholesale
Pharmaceutical wholesale industry is a very key link in the whole industry chain, as an important intermediary, it is the bridge linking pharmaceutical manufacturing enterprises and end consumers (including hospital pharmacies and retail pharmacies, mainly hospitals).
Typical companies in the industry: Shanghai Pharmaceuticals, Sinopharm, Jiuzhou Tong, etc.
Development direction and investment opportunities: scale effect, improve efficiency, optimize varieties is always the key words of the link, circulation and distribution companies due to the direct face of the hospitals, more or less have a number of pharmaceutical manufacturing business can be synergistic effect. Currently the industry's big theme is mergers and acquisitions, some regional scale enterprises are also seeking listing.
6, retail pharmacy
The typical companies in the sub-sector: Yixintang, Yifeng Pharmacy, the common people, Tongrentang, etc.
Direction of development and investment opportunities: the chain of drugstores industry, as a mature industry, to the theme of mergers and acquisitions, in recent years, the Internet sale of medicines and mobile health care, etc. is relatively hot, to the silent chain of pharmacies to bring a number of new elements, such as the Renhe Pharmaceuticals. Dingdang Express App can deliver medicines to the door within 30 minutes in major first-tier cities. The development of most Internet drug companies is still a long way from expectations, and the future explosion lies in the liberalization of Internet sales of prescription drugs and the landing of electronic prescriptions.
7, hospitals, medical examination
Hospital system to the three hospitals, second-class hospitals, first-class and the following hospitals as a typical system, the whole system has been criticized by the topic has continued for many years, including uneven distribution of health care resources, difficult to see a doctor, expensive, drug to feed the doctor, medical problems and so on. The major medical examination companies have completed listing at home and abroad, has entered the oligopoly competition situation.
The typical companies inside the sub-sector: Aier Eye, Tongze Medical, Meinian Health and so on.
Direction of development and investment opportunities: Whether it's public or private hospitals, related investments and mergers and acquisitions have already been laid out by numerous industrial and PE capitals. High-end private clinics represented by United Family, Internet consultations and offline clinic attempts represented by Dr. Chunyu, and various types of physician groups that want to leave the system are all trying to break down the walls of the original public hospitals and doctors, and therefore there are investment and M&A opportunities in various directions.
8, outsourcing services
CRO refers to the contract research organization (ContractResearchOrganization), this type of company to provide services from drug discovery, to clinical trials and other aspects of the service. As the pharmaceutical industry is an administratively controlled industry, the marketing of drugs requires the approval of the regulatory authorities of various countries (CFDA in China), and the obtaining of registration certificates before they can be marketed and sold. Meanwhile, the R&D process of the drug itself is also more complicated. Take small molecule innovative drugs as an example, it needs to go through the process of compound discovery, compound optimization, preclinical animal experiments, clinical phase I, II, III, and new drug declaration. The expenses required for a successfully marketed innovative drug have reached the level of one billion dollars, so there will be various types of counterpart companies in the R&D link.
CMO refers to Contract Manufacturing Outsourcing (ContractManufactureOrganization), which mainly accepts commissions from pharmaceutical companies to provide process development, formulation development, clinical trial drugs, chemical or biosynthesis API production, intermediates manufacturing, formulation production, etc., required for the production of products) and APIs
API (ActivePharmaceuticalIngredient), any substance or mixture of substances intended for use in the manufacture of pharmaceuticals, and which, when used in pharmaceuticals, becomes an active ingredient of a pharmaceutical, and which is essentially an intermediate and raw material for pharmaceuticals.
The typical companies inside the subsector: CRO: WuXi AppTec; CMO: Hequan Pharmaceuticals, Boten Pharmaceuticals; API: Shiyao Group, etc., the scale of the enterprise has been very large, these companies do antibiotics, vitamins, etc. has been very mature, but also has been listed for many years.
Direction of development and investment opportunities: the core competitiveness of the pharmaceutical intermediates production chain is the quality and capacity, on the one hand, requires excellent quality control capabilities, on the other hand, need to have enough capacity to meet the downstream demand. Quality companies in the industry need to bind downstream pharmaceutical companies and good varieties. This segment is typically capital-intensive, suitable for strategic investment, given the maturity of the industry, mergers and acquisitions will become the main trend.
Additionally, the CSI Pharma, Pharma 100, All Pharma, 300 Pharma and SSE Pharma are industry broad-based indices that will include some of the companies in each sub-segment of the track.
In summary, the pharmaceutical index fund can be used as a high-quality tool for us to participate in the pharmaceutical industry investment, and in the investment strategy may choose to broad-based bottom + segmentation to assist the investment model.
Currently the valuation of the pharmaceutical industry is still high, it is recommended not to blindly enter the field. But the pharmaceutical industry as a "slope long enough, snow thick enough" quality track, although the short-term trend is unpredictable, but has a long-term configuration value.
So, for those who want to invest in the pharmaceutical industry, and have the risk tolerance of investors, it is recommended that you can through the way of fixed investment in a batch layout, long-term investment.
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