CRO leader plummeted, what happened to the industry?

The market continues to adjust slightly today, and before the Fed interest rate meeting lands, funds do not dare to attack easily, for fear of doing the wrong direction.

However, from the perspective of the general environment, the current A shares are still relatively healthy, and the catalyst factors have been interpreted in the previous article, and there is no more to say here.

One of the signals is that northbound funds continue to buy net today, and since this month, northbound has been a net inflow for 11 consecutive trading days, with a cumulative net purchase of nearly 80 billion, and nearly 100 billion in the past month.

At present, it is necessary to find a comfortable posture, including position matching and variety selection, and wait for the next wave of the market to attack.

There are two areas to focus on here, one is finance, especially the elastic brokers, who are still the backbone of the stable market and also face the need for valuation repair.

Another is consumption, especially the core varieties of consumption, which have the dual advantages of valuation and defense.

……

Today, the direction of CRO fell sharply, WuXi AppTec fell to a halt, Tigermed, Kanglong Huacheng and so on fell sharply.

The U.S. Treasury Department blacklisted eight Chinese companies, including DJI, the world's largest manufacturer of commercial drones. More importantly, the Commerce Department is expected to add some Chinese companies to the entity list on Thursday, including some involved in biotechnology, according to sources.

The "biotechnology" here is basically a biomedical research and development enterprise, typically WuXi AppTec, which has nearly 80% of its revenue from overseas and has invested heavily in laboratories in North America in recent years.

At present, from the perspective of the domestic CRO track leader, most of the revenue sources are overseas orders, especially in North America. Therefore, once restricted, the order will be greatly damaged, directly affecting the company's revenue.

Let's start with a few points:

First, since 2018, the United States has continuously suppressed Chinese enterprises in the fields of science and technology and military industry, and this time it has extended to biotechnology, in the final analysis, it is still the "card neck" of technology.

As the largest pharmaceutical research and development enterprise in China, WuXi AppTec has the highest technical level in the industry, but in recent years, it has spent a lot of money to build laboratories in North America, which is a considerable cost and a drag on the company's performance.

So why bear the high cost, but also to do, do not rule out that some of the industry's top technology is not available, only through cooperation or technology for the market to obtain.

Second, alternative, WuXi AppTec, as the largest CRO enterprise in China, is still very small in the global industrial chain and is not an indispensable place for overseas companies to do CRO.

After the acquisition of Covance and Chiltern, lab holding companies in the United States (LabCorp) have been one of the global leaders in both preclinical and clinical research. After these two major mergers and acquisitions, the company has become the world's largest CRO. The company's 2020 revenue is as high as $14 billion.

The combined revenue of WuXi App system, including WuXi AppTec and WuXi Biologics, is less than US$3.3 billion in 2020, ranking seventh in the world.

Therefore, if there are really relevant restrictions, WuXi's orders can be fully digested by other companies, drizzle.

This kind of black swan cannot be avoided, and now there are three main considerations.

1, pay close attention to the announcements of related companies, such as WuXi AppTec's first statement that the company operates normally.

2, is to pay close attention to the progress of this incident on Thursday.

3, from the perspective of the entire track, under the continuous fermentation of the overseas epidemic, the dependence on the domestic industrial chain is still relatively heavy, and the basic cost advantage of Cro enterprises in China is very strong, and the industrial chain is difficult to transfer.

Investment can not always think of bottoming out and escaping the top, if you dwell on this will miss all investment opportunities in the market. There is no absolute top and bottom, and indulging in this will get stuck in trading and can't extricate yourself.

And good investment must be logic-driven, supported by a trading system, not affected by market sentiment, but in the adjustment to see a mid-level victory.

That's it...

A share is a process of continuous harvesting of retail investors, lao Zhang fan must be by enhancing the ability to invest in research and grasp the ability to grasp the pulse of the market to arm themselves, this is also the public number: lao Zhang investment research has been doing!

Adhere to the good company, sleep is steady! Welcome to the message area exchange!

No matter how good the investment and research logic is, it also needs the cooperation of the market, the recognition of funds, and a strong ability to choose time.

The above content is only based on the current market environment and the interpretation and analysis of the company's fundamentals, and does not make specific trading suggestions. The stock market is risky, and you need to be cautious when entering the market