"Jia Ling Weight Loss" has dominated the hot search for four consecutive days, will the first investment theme of the Year of the Dragon be the comeback of the concept of diet pills?

Finance Associated Press, February 13 (Reporter Yan Jun) The movie "Hot and Hot" was released on the first day of the Lunar New Year, and Jia Ling, who lost 100 pounds, won the top 7 hot searches, "Jia Ling lost 100 pounds", "Jia Ling's voice has changed", "Jia Ling is really hungry and tired this year" Various topics are constantly hot, and even netizens asked Jia Ling if she could make a weight loss tutorial on the hot search.

"Hot and Hot" tells the story of an ordinary person who finds himself and learns to love himself, and there is also the power to grow under the joyful atmosphere. According to media reports, in order to make this movie, Jia Ling first gained 40 pounds, and then lost 100 pounds in one year. From the first to the fourth year of junior high school, the topic of "Jia Ling weight loss" has not decreased. This has led market participants to speculate whether the concept of weight loss will make a comeback and become the first investment theme of the Year of the Dragon.

Will the diet pill concept make a comeback?

The concept of diet pills is one of the few bright spots in A-shares in the second half of 2023.

In the third quarter of 2023, the concept of diet pills has sprung up, leading a wave of hot market. The Wind Diet Pills Index rose by 24.4% from September 7 to October 16, 2023. Including Borui Pharmaceutical, Changshan Pharmaceutical, Hanyu Pharmaceutical, Shuanglu Pharmaceutical and Aurisco and other stocks among the market value of 10 billion.

However, the popularity of the A-share diet drug concept is more of a reflection of the US stocks, and there are not many listed companies with real strength in China, and there were once many pharmaceutical companies that were punished by regulators for taking advantage of the popularity.

Baihua Pharmaceutical once said at the performance briefing that Huawei Pharmaceutical, a wholly-owned subsidiary of the company, can provide customers with drug research and development services related to liraglutide injection and semaglutide injection, and also said in response to investors' questions on the interactive platform that there is a weight loss product in the research project. In addition, Yuan Jiandong, chairman and general manager of Borui Pharmaceutical, claimed in a conference call that he personally tried the company's product under development BGM0504 injection, and lost about 30 kilograms in two months of injection.

The chairman personally tested the drug and detonated public opinion, but this "hot spot" ended after the regulator took action. Baihua Pharmaceutical, Kanghui Pharmaceutical, etc. received regulatory work letters one after another, and the two companies then clarified that the relevant products are still under research or pilot production, and subsequently, Yuan Jiandong also received a warning letter from the Jiangsu Securities Regulatory Bureau for misleading remarks.

The concept of diet pills after cooling down began to decline, and between October 16, 2023 and February 5 this year, the Wind diet pills index fell by more than 37%. Aoruite, Changshan Pharmaceutical, Hanyu Pharmaceutical, Nuotai Biotechnology and other stocks fell significantly, and the market value also fell below 10 billion again.

However, in the last three trading days before the Spring Festival, the concept of diet pills showed signs of stabilization, and the index rose by 13.52% in the three trading days. Pre-holiday diet pills have picked up again, on the one hand, there have been discussions about Jia Ling's weight loss in the movie warm-up, which has increased the popularity of the event, and on the other hand, weight loss drug companies have also taken frequent actions recently.

Overseas, media reports show that overseas weight loss drug giant Novo Nordisk recently announced that it would spend $11 billion to acquire three production plants, and in the 2023 results released at the end of January, semaglutide sales exceeded $20 billion, and another weight loss drug giant Eli Lilly's financial report showed that the injection of the hypoglycemic drug Tirzepatide in the first three quarters of 2023 was 21.104 billion yuan, an increase of 6.24 times compared with the whole year of 2022. The performance of "weight loss pills double" has allowed the market to see the broad market of weight loss drugs.

In terms of domestic promotion, on January 26, semaglutide tablets, a subsidiary of Novo Nordisk (China) Pharmaceutical Co., Ltd., were approved for marketing for the treatment of type 2 diabetes. This is the first oral GLP-1 (glucagon-like peptide-1) receptor agonist approved for marketing in China. However, it is important to note that this oral semaglutide is intended for diabetes treatment, not weight loss.

In terms of the layout of domestic pharmaceutical companies, Huadong Medicine's marketing authorization application for liraglutide injection for the indication of obesity or overweight has been approved. Innovent Biologics' marketing application for Maxodotide was accepted by the State Food and Drug Administration, and Maxdotide is the first new drug for weight loss indication in China. In addition, pharmaceutical manufacturers such as Hengrui Pharmaceutical, Huadong Pharmaceutical, and Zhongsheng Pharmaceutical are also developing oral GLP-1 weight loss drugs.

The concept of weight loss in the eyes of fund managers

With the increasing base of obese people and the demand of beauty-loving people, the weight loss market has a bright future, and JPMorgan Chase predicts that the market size of China's weight loss drugs is expected to reach $14.9 billion by 2030.

In the three days since its release, the box office of "Hot and Hot" has exceeded 1.3 billion, temporarily ranking first in the Spring Festival stalls. Driven by this event, will the first main investment line at the beginning of the Year of the Dragon be the comeback of diet pills? Judging from the judgment of fund managers on diet pills in previous reports, the concept of diet pills is not over.

Zhou Sicong, manager of Ping An Fund, believes that weight loss drugs are a super theme, and this theme is expected to drive the entire pharmaceutical investment heat. Lai Qingxin, manager of Xinhua Fund Equity Investment Fund, also pointed out that from the perspective of prosperity, overseas large single products represented by weight loss drugs continued to exceed expectations, and the stock price hit a new high, driving the rise of the domestic industrial chain, and there are strong structural opportunities. GLP-1 single-target and multi-target drugs mean that the new growth direction of medicine will have a greater impact on the disease spectrum of the population.

Xu Xun, fund manager of Xinghua Fund, believes that domestic weight loss drug-related concept stocks are divided into two categories, the first is the company that does polypeptide CDMO for overseas core varieties, and the domestic CDMO company can make up for the shortcomings of multinational pharmaceutical companies, and the second is the domestic self-developed GLP-1 related weight loss drugs. There are not many such companies, and they have a relatively first-mover advantage.

What are the ambushes of public funds?

In the face of the theme of weight loss drugs, which fund managers acted quickly? Looking back, many fund managers have laid ambush in advance in the concept of weight loss drugs.

Judging from the stocks that rose significantly in the third quarter of last year, although Changshan Pharmaceutical, Shuanglu Pharmaceutical, and Aurisco did not appear in the public offering of heavy stocks, many public funds have bought the top ten shareholders of the company. GF's core competitiveness mixed appeared in the 9th outstanding shares of Changshan Pharmaceutical in its 2023 interim report, Yinhua special account bought the top 10 outstanding shares of Shuanglu Pharmaceutical in the second quarter of 2023, and Aurisco appeared in the interim report last year, including the Chinese industry boom mix, the 111 portfolio of the National Social Security Fund, Shenwan Lingxin Pharmaceutical Pioneer and a number of private equity and insurance products. In addition, although there is no public fund in the top 10 outstanding shares of Hanyu Pharmaceutical, it has received an increase in the position of northbound funds.

Among the public offering heavy stocks, weight loss drug concept companies are differentiated.

Take the change in holdings at the end of 2023. Hengrui Pharmaceutical, an innovative drug giant, received 127 million shares in the public offering, Borui Pharmaceutical, which has GLP-1 independent research and development capabilities, received a substantial increase in the public offering, Wanjia Fund increased its position by more than 11.06 million shares in the fourth quarter of last year, and China Merchants Fund and Huaan Fund increased its positions by 7.14 million shares and 3.8 million shares respectively. In terms of single funds, the investment advantage enterprises managed by Zhai Xiangdong hold the largest position, with 6.95 million shares, and he made it clear that he is optimistic about the direction of GLP-1 innovative drugs.

The concept stocks of weight loss drugs that have also received key positions in the public offering are Zhongsheng Pharmaceutical, and Wanjia Fund still increased its position the most, adding 19.2989 million shares in the fourth quarter of last year, followed by Industrial Securities Global and Huaan Fund, both exceeding 5.5 million shares. Geng Jiazhou, manager of Wanjia Fund, believes that the theme in 2024 will still be the hot spot and focus of the market. From the fundamentals, artificial intelligence, innovative drugs, and stable growth are still the three main lines that are effective. However, due to the rapid market rotation, fund managers will sell high and buy low positions on individual stocks in these three major sectors to lock in returns and eliminate risks.

In addition, Nuotai Biotech, which has obtained the qualification of semaglutide API, also received a small increase in the public offering in the fourth quarter of last year, and the public offering increased its position by 3.77 million shares.

In terms of public offerings, the stock price has been reduced more than that of Gloria Gloria, which is also a CDMO company, which has been filed in the United States and has the production capacity of semaglutide API industry chain. From the perspective of reducing holdings, index products sold more, and in terms of increasing holdings, HSBC Jinxin Core Growth managed by Lu Bin and CEIBS Pharmaceutical Innovation managed by Gülen increased their positions slightly.

Huadong Medicine, which reduced its position by 17.22 million shares, and China Merchants Fund, which reduced its holdings by a total of 11.17 million shares, also reduced its holdings by 6.07 million shares and 3.72 million shares respectively.

(Financial Associated Press reporter Yan Jun)