Pharmaceutical companies maintain a good momentum of growth

In 2012, it was a quite uncomfortable year in the pharmaceutical industry. Drug safety incidents were frequently launched and medicines were strongly promoted. Drug price cuts have always been a “big stone” that suppresses the performance of the pharmaceutical company’s secondary market. However, the latest data shows that even if there is a significant price cut, pharmaceutical companies can still make a lot of money, and most listed companies have achieved an increase of more than 30% in 2012. And the gross profit rate of the entire pharmaceutical company picked up year-on-year.

Institutional intensive research on pharmaceutical companies' “multiple price reductions in 2012 involved relatively small quantities of pharmaceutical products and relatively small market share. The actual impact on listed companies was not significant, making the performance of pharmaceutical companies this year maintain good growth. "An analyst from a fund company in Shenzhen told reporters yesterday.

The reporter found from the published annual report that although the pharmaceutical market faced various negative “interferences” in 2012, it was still favored by institutions including brokers and funds.

All medicines and Sannuo Biologicals are undoubtedly the two most popular stocks in the industry. The annual report shows that in 2012, Zhongsheng Pharmaceutical achieved an operating revenue of 8,843,332,000 yuan, a year-on-year increase of 18.09%, and a net profit of 181.5117 million yuan, a year-on-year increase of 20.58%. According to the “Registration Form for Reception of Research, Communication, and Interviewing Activities” provided by the company, in the second half of last year, more than 20 institutions conducted research on the company’s operating conditions and fund use. The Sannuo Bio-Annual Report disclosed that in 2012, the company received a total of 20 batches of institutional investors. In particular, the E Fund, Jianxin Fund, and GF Fund have visited the company for field trips.

The above-mentioned fund analysts analyzed the reporters. In fact, the fund has always been more optimistic about the pharmaceutical sector. “The negative news of last year's drug price cuts and medical accidents had a certain impact on the market, and the institutions also needed to meet face-to-face with listed companies. The communication really understands the business condition of the company. From the market feedback, the negative impact is lower than expected,” the analyst pointed out.

In the view of the 8 pharmaceutical companies that have announced their annual report results, all of them achieved positive growth. Among them, Haisike and Sannuo's net profit increased by more than 40% year-on-year, and *ST Fourth Ring and *ST China Pharmaceuticals doubled. The data shows that the pharmaceutical and pharmaceutical industry continues to maintain its momentum, and its profitability will be further enhanced, or it may exceed expectations. It is expected that the main business income of the pharmaceutical manufacturing industry in 2013 will continue to grow by around 20% year-on-year.

The Chinese medicine company's new darling, Luo Yi, an industry analyst at Shenyin Wanguo International, said that the performance of the pharmaceutical sector in the early 2013 to the present was ranked first in the two cities. Although the short-term gains were too rapid, considering the fundamentals of the pharmaceutical industry in 2013, the stock price could continue to be optimistic.

Among the entire pharmaceutical stocks, the market favors proprietary Chinese medicines for larger pharmaceutical companies.

“The overall situation of the pharmaceutical industry in 2012 was relatively good, with Chinese medicines, reagents, and medical devices accelerating faster,” a pharmaceutical research analyst told the reporter. He also pointed out that last year's "price reduction tide" and "limit-resistance order" of the National Development and Reform Commission had affected many pharmaceutical companies, but the main influence was chemical drugs. Both traditional Chinese medicine practitioners have received support from the Ministry of Health. Chinese patent medicines can be described as “blossoms everywhere” in the country. They are no longer confined to feuds in the south, and related A shares such as Baiyun Mountain A, Xiangxue Pharmaceutical, Tasly, and Pien Tze Huang are of sustainable concern.