In 2023, the A-share market will open high and move low, and it will fluctuate throughout the year. In the first half of the year, AI investment was in full swing, and in the second half of the year, Huawei, diet pills, and humanoid robots took turns to perform, and structural opportunities and risks coexisted in the market.
Sohu Finance's "Fund Q&A" column has launched a special series of reports on "Jiyu 2024", reviewing the market in the A-share market segments during the year, looking forward to and predicting the investment opportunities in various popular tracks in 2024, grasping the main logic of asset allocation in the future, and looking for fund products with investment potential.
The fund manager of this issue of "Jiyu 2024" is Guo Peng, fund manager of the equity investment department of Yongying Fund, and this issue focuses on investment opportunities in the pharmaceutical sector in 2024.
Guo Peng, fund manager of the equity investment department of Yongying Fund, has 8 years of experience in the industry and has been managing public offerings since July 2023. Guo Peng adheres to the concept of value investment, concentrated investment, contrarian investment and long-term investment, adheres to long-termism, pays attention to the margin of safety, and pays attention to the company's growth space, company texture and margin of safety. He is currently the manager of Yongying Pharmaceutical and Health Care and Yongying Qiyuan Fund.
In 2023, the pharmaceutical sector will have twists and turns, and it will fall into a correction again near the end of the year. Despite the large overall amplitude, there are still some subdivisions such as innovative drugs and traditional Chinese medicines, which add some bright colors to the plate. Entering 2024, will the pharmaceutical industry come out of the haze and usher in a turnaround?
Guo Peng said that the overall valuation of the pharmaceutical sector is at a historically low level, but there is a large internal differentiation. The valuation of leading enterprises is relatively reasonable at present, and they have high potential in the future, and the leaders of subdivided industries with low penetration and high growth are expected to have more room for growth in the future.
Guo Peng believes that the market space of weight loss drugs is in the order of 10 billion, but the indications for weight loss have not yet been approved in China, and it is necessary to pay attention to the attitude of the regulator towards weight loss indications.
For the field of innovative drugs, Guo Peng said that the current investment in innovative drugs has entered the stage of α, and it is necessary to pay close attention to the competitive landscape and market potential of the pipeline, and the relationship between Biotech and Pharma needs to be considered.
The following is the full text of the interview:
Fund Q: This year, the overall market performance of the pharmaceutical industry has shown a downward trend, and the performance of traditional Chinese medicine and innovative drugs is relatively good, mainly based on what logic, and what are the future investment opportunities?
Guo Peng: The Chinese medicine sector will perform well in the first half of 2023, on the one hand, due to the significant increase in demand for drugs after the epidemic, and on the other hand, the country's clear incentive policies for traditional Chinese medicine, and its own low valuation and obvious relative returns. After the anti-corruption of medicine in July, the hospital market of the traditional Chinese medicine sector was affected to a certain extent, and the overall sector declined. Looking ahead, the overall valuation of the Chinese medicine sector is at a relatively low level, and the investment value will be further highlighted after the operation returns to normal.
The innovative drug sector performed well in the third quarter, firstly, the Fed's interest rate hike expectations gradually weakened, and the suppressive factors on valuation were lifted, secondly, the country's attitude towards encouraging innovation was clear, and the rules such as simple renewal of innovative drug medical insurance negotiations were conducive to the development of the industry; third, the domestic blockbuster innovative drug varieties were licensed out, and the innovation ability was recognized by international giants. Looking to the future, innovative drugs are an industry that creates supply and demand, and with the continuous introduction of varieties that solve clinical pain points, there may be more investment opportunities in the future.
Fund Jia asked: In the second half of the year, the weight loss drug industry chain once rose sharply, how do you view the follow-up market of weight loss drugs?
From the perspective of serious medical treatment, the treatment of obese and overweight people will reduce the risk of various diseases caused by obesity and have great clinical value. Therefore, the market has high expectations for weight loss drugs and the industry chain. Objectively, the market space of weight loss drugs is in the order of 10 billion, but the indications for weight loss have not yet been approved in China, and it is still necessary to pay attention to the attitude of the regulator towards weight loss indications.
Q: In addition to diet pills, the concept of Alzheimer's disease is also one of the hot topics with outstanding performance, how do you see the opportunities in this area?
Guo Peng: The treatment of Alzheimer's disease has always been a medical problem, and the market potential is large, but the clinical effect is not good. At present, the innovation of overseas products is relatively rich, some products have been the first to be listed, and some products have good data in the third phase. In the future, it is necessary to observe the clinical data and marketing of more products to judge whether the market has entered an explosive period.
Fund Q: In the short and medium term, there are new directions in the innovative drug sector that are worth paying attention to, and what are the risks of investing in innovative drugs?
Guo Peng: Recently, there have been more ADC-related product license outs, and in the future, we can focus on the innovation direction in the field of self-exemption. At present, the investment in innovative drugs has entered the stage of α, and it is necessary to pay close attention to the competitive landscape and market potential of the pipeline, and the relationship between Biotech and Pharma needs to be considered.
Fund Jia asked: the recent performance of the medical device industry is relatively strong, mainly driven by what factors?
Guo Peng: The medical device industry itself still has a large number of fields with low domestic penetration, such as electrophysiology, endoscopy, chemiluminescence and so on. The recent strength may be related to the recovery of clinical surgical volumes.
Fund Jia asked: After nearly three years of decline, has the entire pharmaceutical sector reached the bottom now?
Guo Peng: The overall valuation of the pharmaceutical sector is at a historically low level, but there is a large internal differentiation. The valuation of leading enterprises is relatively reasonable at present, and they have high potential in the future, and the leaders of subdivided industries with low penetration and high growth are expected to have more room for growth in the future.
Fund Q: Judging from the monthly investment and financing data of domestic biomedicine, most of the months in 2023 will decline year-on-year, including a year-on-year decline of 74% in August, do you think the prosperity of the domestic biomedical field will usher in a recovery in 2024?
Guo Peng: At present, the investment and financing situation of domestic biomedicine is weak, and the market expectation is pessimistic. We judge that the worst time for the market may have passed, and with the gradual warming of the secondary market, the prosperity of the primary market is expected to gradually recover in 2024.
Q: What do you think will be the style of the entire A-share market next year?
Guo Peng: We are optimistic about the A-share market in 2024. Focusing on two types of assets, industries related to the economic cycle, with the introduction of domestic policies to stabilize growth, the pessimistic expectations of the domestic economy will be reversed;
Q: Looking forward to 2024, which three (Shenwan Level 1) industries do you pay more attention to?
Guo Peng: The focus areas include: medicine, low penetration and high growth segments are expected to usher in high growth, military industry, 2024 sector performance may be expected to usher in a dilemma reversal opportunity, computer, 2024 government enterprise demand recovery, the worst time for the sector may have passed.
Produced by | Sohu Finance
Author | Wang Mengting
Operations Editor | Xue Suwen
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