Affected by the "4+7 volume purchasing" policy, the pharmaceutical and biological sector declined for three consecutive days on December 6, 7, and 10, with a cumulative decline of 8.02%.

However, the pharmaceutical and biological sector stopped falling and recovered yesterday, with an overall increase of 0.79%.

Among them, anti-cancer drugs, traditional Chinese medicine, medical equipment and other sub-sectors increased by more than 1%.

In this regard, some analysts believe that both consistency evaluation and volume purchasing will become a catalyst for the pharmaceutical industry to become more concentrated in the future and accelerate the survival of the fittest. Small, chaotic, and poor companies will accelerate their demise, which will benefit those in the segmented fields.

A leading listed company.

In the secondary market, the oversold pharmaceutical and biological sector may become one of the important reasons for the influx of funds into this sector.

Since the sector adjusted to its previous high on May 29, the share prices of 26 pharmaceutical stocks have been cut in half during this period, and more than half of the stocks fell by more than 30%, reaching 161. The market fell by 17.26% during the same period.

Among the above 161 oversold stocks, Kangmei Pharmaceutical, Huadong Pharmaceutical, Enhua Pharmaceutical, Toujing Life Insurance, Tonghua Dongbao, Jichuan Pharmaceutical, Jingxin Pharmaceutical, Puli Pharmaceutical, Wondfu Biologics, Ruikang Pharmaceutical

From 2013 to 2017, 12 stocks including Xinhua Pharmaceuticals, Xinhua Pharmaceuticals and Yifan Pharmaceuticals saw net profits increase by more than 15% year-on-year for five consecutive years.

Among the above-mentioned 12 oversold high-growth stocks, 7 stocks including Huadong Pharmaceutical, Puli Pharmaceutical, Jichuan Pharmaceutical, Ruikang Pharmaceutical, Yifan Pharmaceutical, Tonghua Dongbao and Jingxin Pharmaceutical have all been given negative feedback by institutions in the past 30 days.

"Buy" or "overweight" and other bullish ratings.

Among them, Huadong Medicine is the most favored by institutions, with the number of institutions giving favorable ratings to 12 in the past 30 days. Regarding this stock, Guosen Securities said: the company's acarbose is the first to pass the consistency evaluation, with obvious leading advantages, and remains the domestic leader in diabetes.

status.

The barriers to the production of acarbose APIs are extremely high. East China controls more than 70% of the domestic API production capacity, ensuring a highly stable supply pattern at the preparation end. Bulk purchases have limited impact on the company.

The company has entered the bottom of historical valuation, and the long-term investment value of the diabetes leader is highlighted, maintaining a "buy" rating.

In addition to oversold conditions and high growth, lower valuations are also another key factor for institutions to pay attention to the above-mentioned stocks.

Among the above-mentioned 7 stocks, the latest trends of stocks such as Ruikang Pharmaceutical (10.62 times), Yifan Pharmaceutical (12.61 times), Jichuan Pharmaceutical (17.06 times), Jingxin Pharmaceutical (18.05 times) and Huadong Pharmaceutical (19.63 times)

The price-to-earnings ratio is below 20 times. As the pharmaceutical and biotech sector stabilizes, these stocks may have room for valuation improvement.

Regarding the overall layout of the pharmaceutical and biological sector, Bohai Securities stated: It is recommended that investors pay attention to leading companies in subdivisions that are less affected by policies and are in line with industry development trends. Recommendations: 1.

In the field of generic drugs, Hengrui Pharmaceuticals, Kanghong Pharmaceuticals, Changchun High-tech, and Huahai Pharmaceuticals and Kelun Pharmaceuticals, which have leading consistency evaluations, have huge R&D pipelines; 2. In the CRO/CMO field, it is recommended to focus on leading R&D intensity and vertical extension of the industrial chain.

WuXi AppTec, Tigermed, and Asymchem; 3.

In the field of retail pharmacies, we are optimistic about Yifeng Pharmacy, Yixintang, and Laobaixing, which have excellent performance and high degree of chain stores.