The pharmaceutical sector rebounds strongly, what will be the market situation in the fourth quarter?

【Pharmaceutical Network Market Analysis】On October 14, the pharmaceutical sector rebounded
strongly.
Data show that on the 14th, pharmaceutical stocks broke out almost across the board, with more than 40 individual stocks up or down, and 62 of them rose by more than 10%, including WuXi AppTec, Mindray Medical, Diray Medical, Mike Biologics, Nanwei Medicine, etc
.
In addition, pharmaceutical ETF funds also rose collectively, among which 8 ETFs such as Yongying Medical Equipment ETF, China Merchants Equipment ETF, and E Fund Pharmaceutical ETF were up and down
.
The pharmaceutical sector rebounds strongly, what will be the market situation in the fourth quarter? The pharmaceutical sector has been on the downward trajectory since the second half of 2021, with the sector index even falling by 40%
at its recent low.
The analysis believes that the outbreak across the board is mainly driven by news, including the landing of IVD centralized procurement, the favorable policy of subsidized loans, and the National Medical Insurance Administration's reiteration that innovative medical devices will not be collected for the time being
.
Medical device sector set off a tide of ups and downs From the perspective of focus, medical devices under the new medical infrastructure have attracted much attention, on October 14, the sector is also the main force of the rebound, the index rose by nearly 10%, including Dirui Medical and many other stocks set off a tide of ups and downs, the industry believes that the market can focus on the overall trend opportunities
of the medical device sector.
At present, listed companies are successively announcing the main operating data of the third quarter of 2022, and many medical device companies are expected to report good
results in the first three quarters.
For example, Mindray expects revenue of RMB7.
9 billion in the third quarter, a year-on-year increase of 20%; The net profit was 2.
8 billion yuan, a year-on-year increase of 20%.

The company expects operating income in the first three quarters of 2022 to be about 23.
3 billion yuan, a year-on-year increase of about 20%, and net profit attributable to the parent to be about 8.
1 billion yuan, a year-on-year increase of about 20%, and the company expressed confidence in achieving the 2022 full-year performance target
.
CapBiotech is expected to achieve a net profit attributable to shareholders of listed companies of 1.
35 billion yuan ~ 1.
45 billion yuan in the first three quarters of this year, a year-on-year increase of 108.
68% ~ 124.
14%.

For another example, MyHome Medical, a manufacturer of precision components and products for medical devices listed on October 12, expects non-net profit to increase by 15.
42% year-on-year to 31.
47%
in the first three quarters of 2022.
Essence Securities believes that under the background of the continuous advancement of new medical infrastructure, the implementation of domestic support policies and domestic leading technology breakthroughs to jointly promote the localization rate, the industry as a whole maintains a high degree of prosperity, looking forward to the future, the procurement demand for medical equipment/IVD/consumables brought about by hospital expansion or new construction may significantly benefit
relevant segments in the medium and long term.
What is the pharmaceutical market in the fourth quarter? For the market situation of the pharmaceutical sector in the fourth quarter, the market is generally full of confidence in the performance of the pharmaceutical and medical sector, and many securities companies have also expressed their views
recently.
For example, Caitong Securities analysis said that there are many favorable policies in the near future, such as simple renewal of innovative drugs and medical insurance negotiations, and innovative devices not included in medical insurance negotiations; At the market level, pharmaceuticals have shown the characteristics of low market capitalization, low holdings and low valuations, and can pay attention to medical devices such as medical equipment, scientific instruments, high-value consumables and diagnostics, innovative drugs, etc
。 Soochow Securities believes that the pharmaceutical sector is expected to make a big counterattack in the fourth quarter for four reasons: First, medical insurance expenditure has grown steadily, and medical insurance expenditure has maintained a growth rate of 12%; Second, including simple contract renewal, subsidized loans and other policy support, the overall policy of medicine began to pick up; Third, the valuation of the pharmaceutical sector is low, at a low position in the past decade; Fourth, the standard allocation of public funds to pharmaceuticals is about 7.
5%, and the proportion of all funds is about 6.
4%, indicating that the pharmaceutical sector is underallocated
by public funds.
The bank is optimistic about the four major sectors
of equipment, innovation, consumption and CXO.
Guojin Securities also pointed out that the market's confidence in the growth ability of the pharmaceutical and medical sector has been increasing with the gradual clarification of the expectations of the third quarterly report, and it is expected that the performance growth in the fourth quarter and the first half of 2023 will continue to accelerate
.
In summary, for the fourth quarter, the industry is still relatively optimistic, especially the innovative drugs, medical devices, high-value consumables and diagnostics on the subdivision track have attracted much attention
.
Disclaimer: Under no circumstances does the information or opinions expressed in this article constitute investment advice
to anyone.