Biological medicine: policy, welcomed the opportunity of slowing down

based on the biological medicine industry policy, developed and slow, and after a quarterly reports on the performance of the high expectations correction step by step, the industry in the future will gradually reduce the negative factors, pharmaceutical stocks in the second quarter is expected to gradually for investment opportunities. Suggestions according to the condition of base drug pricing policy in the second quarter of satellite configuration of exclusive varieties.

Policy risk gradually release

on November 30, 2010 and 2011 on March 7, countries launched a new health reform since another round of drug prices. We can judge the current price is not the end, is expected to follow-up will also have endocrine, antitumor, traditional Chinese medicine (TCM), and other categories of price cuts. According to previous medical insurance directory adjustment practice, expected this year will be for new medicare varieties to reduce the price.

although price range will continue to expand, but is expected to cut co., LTD. : two separate pricing on varieties of adjustment are 19%, can be used as reference; A single variety of decline slightly tall, is expected to 20% ~ 30%; Individual varieties could also increases. In addition, the drugs price benchmark is still the highest retail price, because of the highest retail price and drug terminal retail prices there may be differences, and the middle price difference between terminal retail price and the ex-factory price. So for the highest retail price adjustment, not directly with the proportion to reduce the enterprise ex-factory price, the buffer will be through the intermediate links, the pharmaceutical enterprises of the ex-factory price decline is relatively narrow.

we think the essential drugs dropped prices is hard to exceed market expectations, increasingly reasonable procurement mechanism, try to avoid vicious competition and price policy, a new version of GMP (drug production quality management standard) to implement the required price compensation mechanism, indicates the basic drug price pressure gradually ease.

at present, the government health investment in the direction of the grassroots, once the government subsidies on basic drugs can reach the designated position, the release of grassroots demand is worth looking forward to. In 2011, will be 850 billion yuan investment in the last year, 3 years financial input high uncertainty. Financial investment growth will promote further release of the basic requirements.

industry as a whole optimistic

based on the analysis of industry policy, on the basis of our growth situation of pharmaceutical industry in 2011 remained relatively optimistic. We forecast industry sales revenue growth of 23%, total profit growth of about 28%. Therefore, in the second quarter continues to recommend anti-risk combination layout, safety benefits. Specific investment advice is as follows:

1, Chinese medicine care brands. With the brand appeal, care brand outside of traditional Chinese medicine (TCM) in the price trend, performance is expected in the second quarter could lead to industry. Advice to focus on benefit from ginseng Chinese herbal medicine pharmaceutical price sig (600518), purple xin pharmaceutical (002118); Benefit from donkey-hide gelatin products continuously raise the company (000423); Japanese consumer goods of yunnan baiyao (000538); Tongrentang brand tap (600085).

2, medical services, medicine and biological pharmaceutical business. Medical service: bullish on medical service chain, typically represent love, an eye (300015) and fosun pharma (600196). In addition, the benefit from the expansion ShangRong medical hospital (002551) is also a key investment targets; Pharmaceutical business: medicine circulation industry planning is expected in the second quarter, leading companies benefit from the concentration increase, regional company value by m&a. Key recommendation fosun medicine and east China pharmaceutical (000963); Biological pharmaceutical, biotechnology industry revitalization planning is expected in the third quarter, the key recommendations made by hualan bio-engineering (002007), and Watson (300142).

3, the internationalization of enterprises. Emphatically recommended preparations leading export sea is pharmaceutical industry (600267); Strong research and development strength and cooperate with overseas companies hengrui pharmaceutical (600276), lai mei pharmaceutical (300006) and China pharmaceutical industry (002262).

4, vitamin. In the second quarter of each year are vitamin VE and VA increases the time window, benefit from a recovery in demand this year, Japan's earthquake events, price already in advance. With the advent of four feed demand season in May, support prices and space requirements. On March 7, we define the tip of the rise in price is a temptation, March 16, price increases is the event sexual stimulation, and subsequent demand support prices we more value. Advice and continue to hold buys zhejiang medicine (600216), a new and into (002001).