Recently, the performance of Village A and Aberdeen has been quite eye-catching, and the Hang Seng Index is a continuous long white line, and people's hearts have also fluctuated.
In the industry sector, the bull market flag-bearer brokerage and real estate, there is a lot of good news in the near future, and the "small composition" has gone viral. However, in the specific industry sector, if there is still a main track that is still in the "historical pit", it is the pharmaceutical industry, and there are many people who care about medicine......
First, it is about to fall to the bottom of 2018
Take CSI All-Index Pharmaceutical (000991) as an example.
The current index is on par with the June 2019 bottom, and is only a drop away from the historic bottom of 2018.
It may be a little trembling, and it will fall to the bottom of 2018's history.
Source: iFind, as of April 26, 2024
At the same time, pharmaceutical biology is a real rigid demand industry.
In other words, chips, semiconductors and other scientific and technological fields need to break through the "stuck neck", and life-saving pharmaceutical and biological beings do not need to break through the "stuck neck"?
In addition, pharmaceutical biology is a definitive sunrise track.
Therefore, medicine not only has long-term potential, but also high certainty.
The index point is also not high, and it is obviously limited downward and infinite upward. It may continue to grind the bottom, and the market will be late, but it will not not come without coming.
Of course, the field of medicine is a mainstream category.
There are not only relatively broad index funds for the pharmaceutical industry as a whole, but also subdivided index funds such as CSI Medical Index, Biomedical Index, Chinese Medicine Index, Innovative Drugs, and Hang Seng Medical Index.
Complete 7 indexes, 6 categories (including Hong Kong stock medicine, pharmaceutical industry as a whole, innovative drugs, biomedicine, traditional Chinese medicine, medical care), I screened and found a total of 24 high-quality pharmaceutical index funds, the message you need.
Which of them is more cost-effective at the moment?
I have always believed that "it is the long-term quality of an asset and the price at which it is bought today that determine the long-term rate of return".
For our small and medium-sized investors, buying cheaply is the king! Buying at a low valuation and a low price can easily obtain a higher rate of return, and even if the loss falls, it is limited. As for chasing when the bull is hot, the profit is limited if it wins, and it is deep in the case of a big fall and retracement......
2. Comparison of 7 pharmaceutical indices with Pk
Let's compare and analyze it in detail.
First, market performance and reviews.
It can be clearly seen from the chart below that the Hang Seng Medical Index has performed the best in recent years, far from the bottom below, and it is falling fast and rising slowly.
All index pharmaceutical, pharmaceutical 100, CSI medical and other indices will rise very well in 2020 and 2021, but there are many dishes in the front and many dishes in the back.
In fact, the reason for their decline, I think is very simple, the core is the extreme overestimation, which leads to the extreme killing and falling in the later stage.
Source: iFind, as of April 26, 2024
Because traditional Chinese medicine is less affected by centralized procurement and biased towards brand consumption, it is a "maverick" existence and has stepped out of the independent market. It didn't rise much, it didn't fall much, and it even happened to be the opposite of other pharmaceutical indexes, and it was relatively stable.
Source: iFind, as of April 26, 2024
Second, the latest valuation data comparison and commentary.
First of all, from the perspective of value style - partial price-to-book ratio, the current PB of the Hang Seng Medical Index is only 1.68 times, which is also the lowest among them.
followed by traditional Chinese medicine, biomedicine, and innovative drugs, which are about 2.7 times. Then there is the all-index medicine and pharmaceutical 100 index, which is about 3 times.
The highest is China Securities Medical, which is still 3.5 times.
Source: iFind, as of April 26, 2024
It can also be seen from the chart how crazy medicine was before! China Securities Medical and Biomedicine once rushed to 12 times the price-to-book ratio.
To put it bluntly, it is an asset registered as 1 yuan on the books, and the market price rushes to 12 yuan......
Since most of the companies of Hang Seng Medical have not yet made a profit, the PE valuation of the negative P/E ratio is inflated, and the following chart only focuses on the other ones: the current P/E ratio is about 25 times.
Source: iFind, as of April 26, 2024
Third, drawdown data comparison and commentary.
It is precisely because of the previous extreme huddle that the price-to-book ratio rushed to 12 times, which led to a huge drawdown later.
Taking the past five years as an example, the maximum drawdown of biomedicine and CSI medical was 71.43% and 68.06% respectively, reaching the 70% level. In the same period, the maximum drawdown of all refers to the pharmaceutical and pharmaceutical 100 levels by 50%.
Don't think that the maximum drawdown is only 20%, it's just a small thing. In fact, the latter is equivalent to a halving, while the former is a halving after a halving.
Source: iFind, as of April 26, 2024
Hang Seng Medical has the largest drawdown of 77%, and the drawdown is the largest. However, it has a number of special cases:
(1) The R&D investment of constituent stocks is extremely high, more scientific and technological innovation attributes, and often rises and falls with China General Internet;
(2) Most of the companies are not profitable, and the risk is higher and more volatile;
(3) Listing on the Hong Kong stock market is susceptible to international influences and impacts, such as the Biosecurity Act of the United States.
At the end of the article, I would like to summarize my views with you:
If it were me, I would prefer Hang Seng Medical Fund right now. Because it has the lowest price-to-book ratio, nearly half lower! However, its performance is still unstable, it is vulnerable to international shocks, and it is mainly based on swing strategies.
The second is a wide range of index funds such as all-index medicine and pharmaceutical 100, which can optimize volatility and experience, and the current point and valuation are also more appropriate.
Then there are innovative drugs, biomedicine, and traditional Chinese medicine, which have potential sub-directions, and the current valuation is not expensive. It is also the direction of strong policy support and encouragement.
CSI Medical may have to wait a little longer.
For those who are not sure about the subdivided industry, it is recommended to choose excellent active pharmaceutical funds and control the proportion of positions and investment rhythm by themselves.
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Disclaimer: The content of this article is based on public information research and does not constitute investment advice. Investors should make prudent decisions and bear risks independently.
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