sector performance in the week: the CSI 300 index fell 0.13 per cent in the past week, the pharmaceutical biology (Shenwan) index fell 2.43 per cent, compared with the CSI 300 relative earnings of -2.30 per cent, ranking 19th in the industry. Since the beginning of 2023, the CSI 300 index has fallen 13.80 per cent and the Pharmaceutical Biology (Shenwan) index has fallen 9.15 per cent, compared with a relative gain of 4.65 per cent for the CSI 300, ranking 14th in the industry overall. In terms of the molecular sector, all seven of the seven Shenwan pharmaceutical sub-sectors fell in the past week, with SW chemicals falling the most, at -3.16 percent. Since the beginning of the year, the overall pharmaceutical sector has been in general, with only one sub-sector rising, up 1.97 per cent for SW chemicals, while the remaining six sub-sectors have fallen, with SW Medical Services II falling the most, at -25.56 per cent.

individual stock weekly tracking: 1) individual stock ups and downs: from the point of view of individual stock ups and downs, the pharmaceutical industry A- shares (including the board) in the past week, 48 stocks rose positive, 446 stocks fell. The top five stocks in the past week were Chenguang Medical (-43.42%), Wantai Bio (-22.91%), Kehua Bio (-8.70%), Recreation Guardian (-7.83%), and Notai Bio (-7.00%). The top five stocks in the past week were Zhongke Meiling (-18.38 per cent), Yi Pharmaceuticals (-14.50 per cent), Sharp Ais (-14.34 per cent), Rongchang Bio (-13.96 per cent) and Shuangcheng Pharmaceuticals (-12.34 per cent). 2) Land shares: nearly a week north to the total net sale of 0.82 billion yuan, of which 3.248 billion yuan, outflow of 4.068 billion yuan. From the land stock through the position of the situation, the top five to increase holdings are the sail biology, the source of Concord, Runda Medical, Jiangzhong Pharmaceuticals, Shuangyu Pharmaceuticals. The top five reductions were Hendi Pharmaceuticals, Xingqi Eye Drugs, Tuoxin Pharmaceuticals, Notai Bio, Chinese Health. 3) Bulk transactions: A total of 27 companies in the pharmaceutical and biological industry have had bulk transactions in the past week, with a total transaction amount of 1.144 billion yuan. The top five transactions were Baiji Shenzhou-U, Hengrui Pharmaceuticals, Baili Tianheng-U, United Film Medical, ST Kangmei.

sector valuation level: the PE(TTM) valuation of the pharmaceutical and biological sector reached 28.08X in the past week, still below the five-year average PE34.11X. Sector valuations have been slightly adjusted in the past week and remain at historically low levels. Compared to the same industry, the pharmaceutical and biological sector PE-TTM has a premium of 5.83 per cent relative to all A- shares excluding finance and 162.67 per cent relative to the CSI 300.

industry highlights: 1) the average decline was 53.9, and the results of IVD collection in 25 provinces were announced; 2) Roche Innovation Double Antibody Approved in China; 3) Yifan Bio, Zhengda Tianqing KRAS G12C inhibitors to be included in the priority review; 4) Rongchang Bio MSLN Targeted ADC Approved Phase 2 Clinical in the United States.

recommended attention: in the long run, health insurance control fees and normal collection will continue, enterprises need to choose new varieties, fully grasp the clinical needs, so we are optimistic about enterprises with real innovation capabilities, it is recommended to focus on product-side demand opportunities. Medical devices, conventional diagnosis and treatment continue to resume overlay policy marginal relaxation, the plate is expected to usher in Davis double-click, recommended to pay attention to Murray Medical (300760, buy), Sanyou Medical (688085, buy), Yiren Medical (688198, buy) and so on. In terms of innovative drugs, research and development continue to advance under strict review, pay attention to cutting-edge clinical progress, it is recommended to pay attention to Hengrui Pharmaceuticals (600276, buy), Jingxin Pharmaceuticals (002020, buy), Xingqi Eye Drugs (300573, increased holdings), Kangchen Pharmaceuticals (603590, buy) and so on. CXO, the industry business climate is expected to improve marginally, with the bottom of the investment value, it is recommended to focus on sunshine and (688621, buy), pharmaceutical Mingkang (603259, buy), Kanglong into (300759, increase holdings) and so on.

risk tips

the risk of the implementation of the centralized procurement policy exceeding expectations, the risk of the enterprise's R & D falling short of expectations, asset mergers and acquisitions and pipeline mergers and acquisitions and other investment-related risks