Guoxin Securities·2025-05-14 07:45Investment Rating - The report maintains an "Outperform" rating for the pharmaceutical and biotechnology sector [7][4]. Core Views - The pharmaceutical sector underperformed the overall market this week, with a 1.01% increase compared to the total A-share market's 2.29% rise. The medical device sector led the gains [1][31]. - The report highlights the U.S. government's recent administrative order aimed at providing "Most Favored Nation" pricing for prescription drugs, which may face judicial challenges similar to previous attempts in 2020 [2][28]. - The U.S. healthcare spending reached $4.46 trillion in 2022, accounting for 17.5% of GDP, with government-funded programs like Medicare and Medicaid being significant contributors to this expenditure [16]. Summary by Sections Market Performance - The overall A-share market increased by 2.29%, with the Shanghai and Shenzhen 300 index rising by 2.00%. The biotechnology sector's performance was weaker, with a 1.01% increase [1][31]. - Individual stocks showed significant variances, with JinHao Medical leading with a 24.38% increase, while ST HuLuWa faced an 18.29% decline [35][31]. U.S. Drug Pricing Reform - The U.S. government issued an executive order on May 12, 2025, promoting "Most Favored Nation" pricing for prescription drugs, which aims to lower U.S. drug prices based on international benchmarks [15][28]. - The report notes that the implementation of this order may be limited in the short term due to potential legal challenges and the need for further details [2][28]. Company Ratings and Predictions - Key companies rated as "Outperform" include: - Mindray Medical: Strong R&D and sales capabilities, benefiting from domestic medical infrastructure [42]. - WuXi AppTec: A comprehensive service platform for new drug development, poised to benefit from the global outsourcing market [42]. - New Industries: A leader in chemiluminescence immunoassay, with strong growth prospects [42]. - Other notable mentions include Aide Biological, ZhenDe Medical, and Kangfang Biological, all rated "Outperform" [4][42][44]. Valuation Metrics - The TTM P/E ratio for the pharmaceutical and biotechnology sector is 32.26x, compared to the overall A-share market's 18.43x. Sub-sectors like chemical pharmaceuticals and biological products have higher P/E ratios of 37.86x and 38.40x, respectively [37][38].