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Chuangjinxin Fund Pi Jinsong: Optimistic about innovation and consumption upgrade investment opportunities

At 04:56 on April 15, 2019
Author: Zhu Wenbin
source: Shanghai Securities News
edit:Eastern Fortune Network

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Public offeringfundThe first quarter "records" were announced recently. According to public data, in the first quarter of this year, Chuangxin’s health care industry C share achieved a yield of 37.95%, exceedingPerformanceBenchmark 12.05%, ranked second among 77 medical themed fund categories, while in the first quarterEquity fundThe top rankings in the yields list.

Why did you achieve such a good performance in the first quarter and what investment strategy will be adopted in the future? Recently, the reporter interviewed Pi Jinsong, the fund manager of Chuangjin Hexin Healthcare Industry. He graduated from China Pharmaceutical University with a master's degree in innovative drug research and development and a senior researcher in the pharmaceutical industry. These experiences have enabled Pi Jinsong to have a deep understanding of the pharmaceutical industry.

In summing up the reasons for the excellent results in the first quarter, Pi Jinsong said that on the one hand, the pharmaceutical sector suffered a large decline in the price of medicines purchased last year. This year, the market rebounded more, and the major stocks in the sector rose well. At the same time, due to the policy of establishing a science and technology board and a pilot registration system, innovative drugs and related targets have received market attention. On the other hand, in the operation, the two stock picking ideas of performance and industrial trends were adopted, and several investment opportunities of individual stocks with large gains were grasped.

"With the advancement of reform policies such as drug review and medical insurance payment, the pharmaceutical sector will continue to differentiate in the future for a long time." Pi Jinsong analyzed that drug consistency evaluation and price reduction policies will gradually phase out many small and medium-sized enterprises. Taking large infusions as an example, after years of reshuffle integration, the growth rate of several large infusion companies in 2018 exceeded 20%, and the price of infusions gradually recovered, and the competition pattern improved significantly.

At the same time, most of the profits of domestic pharmaceutical companies are derived from generic drugs. After the purchase of drugs, some drug prices have fallen sharply. Only by continuously introducing new products can pharmaceutical companies resist the risk of drug price cuts. From the experience of foreign countries, the original research drugs have "patent cliffs", and due to the lag of consistency evaluation in China, the price of patent expired drugs is still high, which brings great pressure on medical insurance funds. With the gradual implementation of national drug collection and medical insurance payment prices, the price of the original research drug will drop sharply, and the shrinking of the original research drug market will bring opportunities to domestic generic drug companies.

Pi Jinsong believes that after the procurement policy of generic drugs is clear, it will force enterprises to increase investment in research and development. It can be seen from the 2018 annual report of listed companies that the investment in R&D of most leading enterprises has grown rapidly. Considering that the speed of domestic drug review is accelerating and the time to market for new products is greatly shortened, the domestic pharmaceutical industry has the opportunity to transform and upgrade to innovation.

“Overall, the procurement policy with quantity has accelerated the reshuffle of the industry. It is a crisis for both companies.” Pi Jinsong said that the implementation of investment should be based on the product line and R&D of the company. Companies can win in the competition and have good investment opportunities.

Based on the above analysis, Pi Jinsong believes that, specifically to the medical sub-sector, it is more optimistic about the investment opportunities brought about by innovation and consumption upgrading.

“With the changes in domestic pharmaceutical policies, drug price cuts and competition have led to a shortened life cycle of old products, and medical insurance has increased support for new products. Continuous innovation has become the key to success for enterprises.” Pi Jinsong said that innovation is the eternal theme of the pharmaceutical industry. In recent years, domestic companies have successively entered the harvest period of new products, and listed a number of innovative drugs andInnovative medicalInstruments have brought huge profits to enterprises.

In terms of consumption upgrades, some consumers of pharmaceutical consumer goods are highly viscous and have the ability to transfer costs and continue to increase prices. Some medical services have a product premium space through continuous product innovation, and consumers are willing to pay high prices. As the income of residents increases, the consumption upgrade products have the potential for sustainable development. The key is that products and services have a brand or technology premium space.

In addition, the segmentation areas that follow the trend of industrial development are also worthy of attention. Pi Jinsong believes that the separation of medicines is a certainty trend, and huge hospital prescriptions will flow out to retail pharmacies, and retail pharmacies will also see rapid development.

As for the highly-recognized science and technology board, Pi Jinsong believes that medicine is a high-input long-cycle industry, especially for start-up enterprises, which has a large demand for funds, and the company will enrich the financing channels of start-ups. In terms of investment, he believes that for pharmaceutical companies that are not yet profitable, investors need to evaluate the products under research, including clinical value, listing probability, market potential, etc., which puts higher requirements on relevant investment research capabilities.

(Article source: Shanghai Securities News)

                                (Editor: DF380)


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