The pharmaceutical industry has entered a recovery period. According to the analysis data of the economic operation of China pharmaceutical industry in the first half of 2007 released by the National Development and Reform Commission, the pharmaceutical industry began to pick up in the first half of this year. This is the first time that the pharmaceutical industry has shown signs of rebound since the previous two years. In the first half of this year, the operation of the pharmaceutical industry was characterized by rapid growth in production and sales and more income. From June to June this year, the total industrial output value was 3 1000 billion yuan, a year-on-year increase of 22.5%. Among them, the growth rate of sub-sectors such as Chinese herbal pieces processing, sanitary materials and medical supplies, chemical raw materials, biochemical drugs and medical devices and equipment manufacturing is higher than the average level of the whole industry; The sales output value was 29 1.3 billion yuan, up 22.7% year-on-year. At the same time, from June 5438 to May, the profit of the whole industry was 198 billion yuan, up 36 1% year-on-year, the best level since the Tenth Five-Year Plan. According to the annual data of SFDA Southern Institute of Pharmaceutical Economics, the overall benefit of China's pharmaceutical industry improved significantly in the first half of this year. It is estimated that the total output value of the pharmaceutical industry will exceed 600 billion yuan, with a year-on-year increase of 17.8% ~ 18.5%, and the whole industry is still growing steadily. The recovery of the pharmaceutical industry is also reflected in the quarterly reports of pharmaceutical listed companies. According to the data, compared with the data of the semi-annual report, the profit growth rate of the pharmaceutical industry in the third quarterly report has accelerated this year. From June 2007 to June 2007, the total income of main business of listed companies in pharmaceutical industry increased by 65,438+05.3% and the net profit increased by 43.5%. In September 2007, the main business income of listed companies in the pharmaceutical industry increased by 65,438+0,265,438+0 year-on-year. The promotion of industry prosperity has provided a solid foundation for the speculation of this sector. Medical reform will promote the great development of the industry. Although the medical reform plan has not yet been formally introduced, the basic goal has been very clear. At present, the supporting new rural cooperative medical system, the zero-difference sales of commonly used drugs in community medical institutions, and the basic medical insurance for urban residents have been launched first, achieving good results, and universal medical insurance will also be ready. The eighth part of the report of the 17th National Congress of the Communist Party of China clearly stated that "the establishment of a social security system covering urban and rural residents should be accelerated" to ensure people's basic livelihood. Establish a basic medical and health system. In the next 10 year, China will achieve the goal of universal basic medical insurance. On March 2nd, this year, the State Council discussed and approved in principle the Outline of the 11th Five-Year Plan for Health Development. The Outline points out that during the Eleventh Five-Year Plan period, a basic medical and health system framework covering urban and rural residents will be initially established nationwide, including a relatively standardized public health service system, a new rural cooperative medical system and a three-level medical and health service system at county, township and village levels, a relatively complete urban community health service system, a relatively standardized national essential drug system and a relatively standardized public hospital management system. At the same time, the state has repeatedly stressed that the government will increase investment in existing medical institutions or future primary medical institutions, including community hospitals and rural health centers. At present, China's health expenditure accounts for only 4.7% of GDP, which is far behind the level of developed countries. Due to the increase of government investment, the problems of "difficult to see a doctor" and "expensive to see a doctor" will be gradually solved, which will promote the release of people's previously suppressed medical needs. It can be said that medical reform will bring great development opportunities to the pharmaceutical market. It is expected that the pharmaceutical industry will maintain a rapid development trend in the future, and all sub-sectors of medicine will benefit from it, especially pharmaceutical circulation and medical devices. After the adjustment of defensive varieties in the market, the pharmaceutical sector has obviously lagged behind the broader market since 5.30, especially after the sharp decline of 10, pharmaceutical stocks generally returned to the low of 5.30, and some even hit a new low in the year, with a large cumulative decline. At present, after a round of market crash, the index has fallen by more than 20%, indicating that the short-selling kinetic energy of the short-term market has been released to a certain extent. We believe that in the market adjustment, investors choose defensive strategies. As a typical defensive variety, the pharmaceutical sector is expected to be favored by bargain-hunting funds under the background of industry recovery and medical reform policy, thus becoming one of the main goals of fund position adjustment. In the choice of pharmaceutical stocks, investors can start from the following aspects. First of all, the performance of leading enterprises in the industry has grown steadily, and the current P/E ratio is low. After a round of sharp decline, the valuation advantage reappeared. Secondly, varieties that directly benefit from medical reform, with the expansion of demand in rural market and community medical market, the consumption of basic drugs with low price and remarkable curative effect will be enlarged, and generic drug manufacturers with high quality and low price will become the biggest beneficiaries in medical reform. In addition, after the introduction of the medical reform plan and centralized bidding by local governments, each place will choose 2-3 pharmaceutical circulation enterprises for unified distribution. The distribution volume of these circulation enterprises will be rapidly enlarged and the market concentration will be higher and higher. Other smaller circulation enterprises will face the fate of being eliminated, and pharmaceutical circulation enterprises can pay attention to it. Finally, oversold low-priced pharmaceutical stocks and stocks with incremental funds are also worthy of investors' attention.