医药生物：至暗时刻或已过，布局底部核心资产

Investment Rating - The report maintains an "Outperform" rating for the pharmaceutical and biotechnology sector [2]. Core Insights - The darkest hour may have passed, and it is time to position for core assets at the bottom [2][3]. - The pharmaceutical sector index rose by 3.2% during the week of July 29 to August 2, outperforming the CSI 300 index by 3.9 percentage points [2][3]. - The report highlights that the pharmaceutical industry is at a historical low in terms of valuation, with a 19.5% decline since the beginning of 2024, underperforming the CSI 300 index by 18.1 percentage points [2][14]. Summary by Sections 1. Market Review and Investment Strategy - The report suggests increasing allocations to the pharmaceutical sector, anticipating excess returns post semi-annual reports [9]. - Key policies for 2024 include the promotion of DRG/DIP, which will enhance cost-effectiveness in medical institutions, and the expectation of adjustments in basic drug pricing [9]. - The report emphasizes the importance of focusing on companies with strong fundamentals and potential for recovery in Q3 [3][9]. 2. Pharmaceutical Industry Data Tracking - The report indicates that the darkest period for the industry has passed, with signs of recovery in the second quarter of 2024 [2][14]. - The pharmaceutical manufacturing sector experienced a revenue decline of 13.4% in 2023, but showed signs of recovery with a 0.6% profit increase in the first half of 2024 [16][18]. - The report notes a 2.5% increase in the income of the medical insurance fund from January to May 2024, while expenditures rose by 18.8% [21][23]. 3. Weekly Market Performance - The report details that the pharmaceutical sector index outperformed the CSI 300 index, ranking fifth among all sectors [2][3]. - The top-performing stocks during the week included Xiangxue Pharmaceutical (+73.25%) and Hehua Co., Ltd. (+47.62%) [2][3][27]. - The report highlights that the overall trading volume for the pharmaceutical sector increased by 30.9% compared to the previous trading period [25]. 4. Investment Focus Areas - The report identifies five main investment lines: innovative drugs and devices, state-owned enterprise reforms, traditional Chinese medicine, medical devices, and raw materials [3][9]. - Specific companies to watch include Heng Rui Pharmaceutical, FOSUN Pharmaceutical, and Xinda Biopharmaceutical [3][12]. 5. Valuation and Market Sentiment - As of August 2, 2024, the overall valuation of the pharmaceutical sector is at 24.34, reflecting a 0.70 percentage point increase [121]. - The report notes that the sector's valuation premium relative to the broader market remains at a historically low level [121].