"Vaccine Mao" plummeted by 15 percent! What is the situation? Many star funds have reduced their positions ahead of schedule

Following yesterday's "Northeast Medicine Mao" Changchun High-tech Plummet, today's "Vaccine Mao" Zhifei Biotech share price also fell miserably.

As of the close, Zhifei's share price fell 11.99%. Yesterday, Zhifei Biotech announced two performance reports, and the net profit in 2023 maintained a double increase, but the performance in the first quarter of this year was not very good, down nearly three percent year-on-year.

From the perspective of fund holdings, many funds reduced their positions in Zhifei Biotech in the first quarter, including many star funds, such as ICBC Frontier Medical Fund managed by Zhao Bei, and Rongtong Health Industry managed by Wan Minyuan.

In view of the market performance of the pharmaceutical sector this year, a number of fund managers analyzed in the first quarterly report, and under the influence of the epidemic, medical anti-corruption, centralized procurement and other aspects, some pharmaceutical listed companies generally have the pressure of a high performance base in the first half of 2024. Looking ahead, the negative impact of the pharmaceutical sector will gradually be cleared, and we are optimistic in the medium and long term.

Net profit fell by nearly three percent in the first quarter, and the stock price once fell by more than 15%

On April 23, "Vaccine Mao" Zhifei Biology opened low and went low, plummeting by more than 15% in the morning, and as of the close of the afternoon, the stock price fell 12%, with the latest stock price of 34.39 yuan per share, with a total market value of 84.7 billion yuan.

Just yesterday evening, Zhifei Biotech announced its annual results for 2023 and the first quarter of 2024. Zhifei's revenue and net profit in 2023 maintained a double growth trend, but the performance in the first quarter of this year was not very good.

Specifically, the 2023 annual performance report shows that the company's annual operating income is about 52.918 billion yuan, a year-on-year increase of 38.3%, the net profit attributable to the parent company is about 8.07 billion yuan, an increase of 7.04% year-on-year, and the non-net profit attributable to the parent is 7.915 billion yuan, a year-on-year increase of 5.4%.

The 2023 results were announced at the same time as the 2024 first quarter report. According to the first quarterly report, Zhifei Biotech achieved operating income of 11.396 billion yuan in the first quarter of this year, a year-on-year increase of 2%, a net profit attributable to the parent company of 1.458 billion yuan, a year-on-year decrease of 28.26%, and a non-net profit attributable to the parent company of 1.455 billion yuan, a year-on-year decrease of 28.36%.

In fact, since the beginning of this year, the overall trend of the pharmaceutical industry has been relatively flat, and the Shenwan Pharmaceutical and Biological Index has fallen by 15% this year. The overall adjustment of the sector, many stocks in the pharmaceutical industry have performed poorly, and Zhifei Biotech has fallen by more than 30% since the beginning of this year. In addition, yesterday, Changchun High-tech fell 6.35%, and it has fallen by more than 20% this year.

A number of star funds have significantly reduced their holdings

Compared with the 2023 annual report of Zhifei Biotech, the Chinese reporter of the brokerage found that the annual report disclosed that 1,178 funds were held, while only 178 funds held positions in the first quarter of 2024, and the number of funds held by them was significantly reduced.

From the perspective of the number of shares, at the end of the first quarter, E Fund, China Merchants Fund, and ICBC Credit Suisse Fund had 6, 15, and 7 fund products with heavy positions in Zhifei Biotech, ranking first in the number of shares.

From the perspective of active equity products, as of the end of the first quarter, the 10-billion-level product ICBC Frontier Medical Fund managed by Zhao Bei held 8 million shares of Zhifei Biotech, a decrease of 6.0696 million shares from the end of the fourth quarter of 2023, from the third largest heavy stock at the end of last year to the sixth largest heavy stock at the end of the first quarter of this year.

Dongfanghong Ruixi managed by Wang Yanfei and others held 7,156,900 shares of Zhifei Biotechnology at the end of the first quarter of the third year, a decrease of 2,155,800 shares from the end of the fourth quarter of last year. Rongtong Health Industry managed by Wan Minyuan reduced its position in Zhifei Biotech by 650,000 shares in the first quarter, and in fact, the fund has reduced its holdings for three consecutive quarters since the third quarter of 2023.

In addition, funds such as China Merchants Blue Chip Selection, Tianhong Pharmaceutical Innovation Mix, China Merchants Jinan Growth Strict Selection, China Merchants Quality Upgrade Mix, China Merchants Manufacturing Transformation, and CITIC Prudential Happiness Consumption Mix reduced their holdings of Zhifei Biotech by more than 100,000 shares.

Some pharmaceutical companies are facing downward pressure on their performance

Since the beginning of this year, due to the impact of geopolitics and macro environment, the pharmaceutical sector as a whole is still in the adjustment stage, and the trend of sub-industries within the sector is differentiated. In the first quarter, the Shenwan Pharmaceutical and Biological Index fell by 12.08%, ranking first among the Shenwan first-class industry indexes.

In view of the weak performance of the pharmaceutical sector in the first quarter of this year, a number of fund managers recently analyzed it in a quarterly report.

Wan Minyuan, manager of Rongtong Health Industry Fund, believes that there are several main reasons: first, looking back, the one-time impact of the base brought about by the demand peak after liberalization in the first quarter of last year; second, at present, the medical anti-corruption since the third quarter of last year still affects the current performance of some sub-fields to a certain extent; third, looking back, it seems that we have not yet seen a particularly clear new main line come out.

Guo Xiangbo, manager of Tianhong Pharmaceutical Innovation Fund, said in a quarterly report that if analyzed externally, the external worries in the first quarter have greatly affected the development expectations of the CXO industry, and from the perspective of internal troubles, the high year-on-year base of the pharmaceutical sector in the first quarter of 2023 has also reduced the horizontal comparative advantage of the pharmaceutical sector.

Zhao Bei said in a quarterly report that with the normalization of anti-corruption actions in the pharmaceutical industry, hospital diagnosis and treatment are also recovering steadily, but in the first half of this year, related companies generally still have the pressure of a high base of performance.

Optimistic about the pharmaceutical sector in the medium and long term

In the first quarterly report, many fund managers looked forward to the future development of the pharmaceutical sector from multiple perspectives such as valuation and industry demand.

Zhao Bei said that from the second half of this year, with the gradual clearing of the negative impacts of the epidemic, medical anti-corruption, centralized procurement, etc., the pharmaceutical sector is expected to return to the track of relatively stable growth before the epidemic. Zhao Bei said that in the investment, it still avoids off-label abuse of in-hospital prescription drugs and low-value interest varieties, and will be more cautious about companies whose stock prices do not fully reflect the downward revision expectations brought about by anti-corruption. For companies whose medium- to long-term prospects are not affected, and the market has fully reacted to the downward revision brought about by anti-corruption, they will take the opportunity to increase their holdings.

Wan Minyuan believes that from the perspective of risk-return ratio, the current can be more optimistic, the pharmaceutical index is still hovering at the bottom of the nearly 4 years, the risk release at the valuation and transaction level is sufficient, and the core driving force driving the future growth of the industry has not fundamentally changed, the aging population, the change of the disease spectrum, the supply of innovative technology, the overall valuation cost performance and potential space of the sector have been attractive.

Wan Minyuan is optimistic about three types of companies: deterministic performance growth, clear logic increment, and pessimistic pricing. Looking forward to the future, he said that with the advent of a new round of aging climax, in the context of the stabilization of the policy framework and the fading of the transient base effect of the suppression of the plate, he remains optimistic about the medium and long-term prospects of the plate.

"We also have to see the pace of recovery of the pharmaceutical industry in 2024, whether from the perspective of base or policy rhythm, it is likely to be a year of low and high, and it is expected to be gradually reflected in the performance of the sector after the second quarter. In terms of investment direction, innovation and going overseas will open the ceiling of the pharmaceutical industry in terms of valuation and market value space respectively, and will still be the logical main line in the pharmaceutical industry in the long term. Guo Xiangbo said.

Editor-in-charge: Wang Lulu

Proofreader: Wang Jincheng