The Buyer Bet On Two Demands To Prove The Long-Term Value

In the first half of 2020, when the new crown pneumonia epidemic is looming, the performance expectations of some biomedical and medical companies are constantly fulfilled.

According to the statistics of 21st century economic report reporters, among the 81 medical and medical enterprises that have disclosed the mid-term performance forecast of 2020 as of July 13, 47 companies have shown signs of turning losses, continuing profits, increasing in advance and slightly increasing, accounting for nearly 60% of the total number of enterprises that have been reported in advance.

Some of them have seen explosive growth in the performance of some medical companies. For example, in the first half of the year, Yingke medical is expected to make a net profit of 1.9 billion yuan to 2.1 billion yuan, with a year-on-year growth of 2581% - 2864%; and the net profit of Dongfang biological Co., Ltd. is expected to reach 463 million yuan, an increase of 1294.1%; in addition, the net profit of Yuyue medical, Yangpu medical, Jingfeng medicine, Kanghua biology and other pharmaceutical companies will also double or even several times.

From the perspective of market performance, the medical and pharmaceutical industry has experienced a certain rise in the first half of the year. A seller pointed out that with the continuous spread of the epidemic in overseas areas and the rising number of infected people, the fundamentals of pharmaceutical and medical companies will still benefit from this reality in the second half of the year and next year.

On the one hand, the long-term demand for medical institutions in different countries and regions is still worthy of long-term impact There is an important potential for the circuit to break out.

Explosive performance

On July 13, Yiling Pharmaceutical Co., Ltd. released a performance pre increase announcement, saying that it is expected that the growth rate of net profit in the first half of the year will be about 682 million yuan to 728 million yuan, and the performance growth rate is expected to reach 50% - 60% year-on-year.

As the manufacturer of Lianhua Qingwen, Yiling Pharmaceutical Co., Ltd. achieved a sharp increase in the first half of the year, which seems to be within the market expectation. Yiling pharmaceutical also frankly said, "in the first half of 2020, the sales revenue of Lianhua Qingwen products increased rapidly compared with the same period last year. In the second quarter, with the promotion of the popularity and reputation of Lianhua Qingwen products at home and abroad, the sales volume increased significantly year on year."

In fact, Yiling pharmaceutical is only a relatively small representative of the performance growth of pharmaceutical and medical enterprises in the first half of the year.

Performance growth is even more obvious in the medical industry. According to its pre increase announcement released on July 11, the highest net profit in the first half of the year is expected to reach 2.1 billion yuan, with a year-on-year growth rate of 2581.8%.

The prevention and control of "yihuaqing" is more different from that of yinghuaqing.

"Due to the impact of the new coronavirus epidemic, the global demand for disposable protective gloves is surging, and the price of disposable protective gloves of the company has increased greatly, which makes the sales revenue and gross profit margin of the company increased during the reporting period." It said.

In addition, since last year, its expansion plan, as well as the US trade representative's exemption of medical products tariff, have also played a positive role in increasing its gross profit rate and export volume.

"Since August 2019, the company's Anhui production base has successively put into production PVC glove production lines and nitrile gloves production lines, which has increased the production capacity of gloves during the reporting period compared with the same period last year; meanwhile, through continuous internal lean, improvement and innovation, the company further saves energy, improves production efficiency, improves product quality, and plays a positive role in improving the company's gross profit margin." It is pointed out by British Medical. "The company's growth in the trade plate of protective products such as masks and isolation clothing has also played a certain role in promoting the growth of performance and the promotion of gross profit margin."

The sensitivity of the market to the performance surge is still high. On the first trading day after the release of the pre increase information, the market value of the company reached 33.6 billion yuan.

Some companies have benefited from epidemic detection. For example, Dongfang bio, which is expected to increase by 1294% year-on-year in the first half of 2020, mainly benefits from its new crown test paper and new crown detection kit.

"The company's products have actively participated in the global epidemic prevention and control, and achieved good market recognition." According to an oriental biologist.

"At the beginning of the epidemic, the market was expected to bring a fundamental boost to the pharmaceutical and medical stocks. Now, at the time point of the semi annual report, it is actually equivalent to the previous expectation, which is constantly being fulfilled." Said an investment manager at a private equity firm in Beijing.

The logic of the bet

As a matter of fact, the performance growth of medical and pharmaceutical companies represented by Yiling pharmaceutical, Yingke medical and Oriental biology in the first half of the year is not a few cases. In the first half of the year, the net profit of the pharmaceutical industry is expected to increase by RMB 2.59 billion, which is expected to reach the highest growth rate of RMB 2.59 billion in the first half of the year, and the net profit of the pharmaceutical industry is expected to reach the highest growth rate of RMB 22.57 billion.

According to the statistics of 21st century economic report, as of July 13, there were 25 medical and medical companies with more than 100% increase in performance in the first half of the year, accounting for more than half of the total number of pharmaceutical and medical companies with improved performance.

Although the company's share price has increased to a new high, it is worth mentioning that the medical share price has reached a new high. Wind data statistics show that in 109 trading days after the Spring Festival, the national composite biomedical index has risen by 85.32%, 70% higher than that of the Shanghai index in the same period; the two indexes of China Securities medicine and China Securities Medical Co., Ltd. also rose by 65.25% and 48.19% respectively, exceeding the overall market by 50% and 30% respectively.

The index and the leading part of the index have been relatively high. As of July 13, the value of TTM P / E ratio of Hengrui pharmaceutical was close to 100 times, and the valuation of Guozheng biomedical index was as high as 106 times; the valuation of two industries of Zhongzheng medicine and Zhongzheng medical was 60 times and 113 times.

"The market itself has expectations on the subject of medicine, so the early increase indicates that the market expectation has been overdrawn in advance, but in the long run, there is still reason to increase the allocation of pharmaceutical sector." A Shanghai brokerage pharmaceutical industry analyst said.

At present, there are still two types of logic in the medical sector. One of them is the need for follow-up prevention and control.

"Although the domestic epidemic situation has been effectively controlled, the spread speed of many countries and regions is accelerating, and R0 (basic infection number) has an upward trend, which will also affect the production capacity of medical products in these countries and regions, which will further stimulate the export of domestic medical and medical products." The head of a private equity firm in Shanghai pointed out that "even if the epidemic situation is controlled in overseas areas, governments may also pay more attention to medical resource reserve, which will still support the long-term fundamentals of this sector in the medium term."

Another logic for the buyer's organization to be optimistic about the medical industry is long-term demand.

"With the continuous economic transformation and the growth of residents' disposable income, the long-term supply and demand of the medical and pharmaceutical industry is still unbalanced. People will be more willing to pay for high-quality medical services, and it is also a development opportunity for more innovative pharmaceutical enterprises. This trend can obviously become the reason for the long-term allocation of pharmaceutical and medical sectors." The person in charge of the above private placement said.

?