Pharmaceutical and Biological Industry in the First Half of the Wind and Waves of Medical Equipment Performance Doubled

In the first half of 2020, the new crown outbreak has put the pharmaceutical and biological industry on the fore. As the "bearer" of this year's A-share market, how did the pharmaceutical and biological industry perform in the first half of the year?

As this year's mid-year report closes, Tonghuashun iFinD data show that as of August 23, a total of 150 listed companies in the A-share biopharmaceutical industry issued their 2020 semi-annual reports. Among them, the operating income of 73 listed companies increased year-on-year, accounting for less than 50%, and the net profit attributable to shareholders of 92 listed companies increased to varying degrees, accounting for more than 60%.

It is worth mentioning that the outbreak not only led to the differentiation of performance, but also directly led to the market value of listed companies in the industry share price differentiation. So far this year, 287 listed companies in the biopharmaceutical industry have seen their share prices rise to varying degrees, with 122 of them up more than 50 per cent, according to Tonghuashun iFinD. In addition, 21 listed companies fell more than 20 per cent.

23 companies doubled their net profit.

Medical device sector accounts for nearly 70%

In the first half of 2020, affected by the new crown epidemic, the global demand for medical equipment related to epidemic prevention materials increased dramatically, such as medical masks, protective clothing, isolation clothing, medical gloves, ventilators, thermometers and other once in short supply, to the performance of related enterprises brought growth opportunities.

According to Tonghuashun iFinD data, there are currently 23 companies to achieve a year-on-year doubling of net profit attributable to shareholders of listed companies, including Zhende Medical, Oriental Bio, Shushi Bio, Baolet, Yangpu Medical, Omei Medical, Libang Instruments, Haizheng Pharmaceuticals, Sunda Bio, Nanwei shares, Golden Domain Medicine, Crown Biology and so on.

From the perspective of sub-sectors, the above-mentioned listed companies to double net profit mainly from the medical device sector, accounting for nearly 70%. Specifically includes 3 chemical API enterprises, 1 chemical preparation enterprise, 1 biological products enterprise, 1 medical service enterprise, 1 Chinese medicine enterprise, 16 medical device enterprises.

Among the listed medical companies that have published their 2020 semi-annual reports, Zhende Medical temporarily ranked first in the increase in net profit. It is understood that during the reporting period, the company realized the main business income of 381.43493 million yuan, an increase of 404.78 percent over the same period last year, of which the epidemic prevention supplies sales of 264.82775 million yuan. Affected by the substantial increase in demand for new crown testing products, Oriental Bio, Shushi Bio and other companies achieved explosive growth in performance. For example, the 2020 semi-annual report released by Oriental Bio showed that the company achieved operating income of 828.15 million yuan, an increase of 388.05 percent over the same period last year, and net profit attributable to shareholders of listed companies of 523.9468 million yuan, an increase of 1477.45 percent over the same period last year. During the reporting period, the company's operating income increased by 368.65 percent year-on-year, while net profit attributable to shareholders of listed companies increased by 923.30 percent year-on-year.

It can not be ignored that the outbreak of the epidemic, so that medical institutions will be the main resources to prevent and control the epidemic, normal medical activities are affected, hospital surgery, outpatient volume are reduced to varying degrees, non-epidemic materials related to medical equipment and other market use and demand is also correspondingly temporarily reduced. Tonghuashun iFinD data show that Dongsan, Jichuan Pharmaceuticals, Twain Jinma and other companies in the first half of this year's net profit decreased by more than 100 million yuan year-on-year. In addition, the net profit attributable to shareholders of listed companies in the first half of this year was loss-making.

Twenty-one companies have invested more than 100 million yuan in research and development.

Hengrui Pharmaceuticals reached a new peak of 1.8 billion yuan.

Biopharmaceutical enterprises if they want to maintain market position, will inevitably in high barrier products, innovative drug equipment layout, and listed companies in research and development investment, to a certain extent, for the market outlined the company's prospects.

Hengrui Pharmaceuticals, which had a total market capitalization of more than 500 billion yuan, reported that the company's total investment in research and development from January to June exceeded 1.8 billion yuan, ranking first in the industry, an increase of 25.56 percent over the same period last year, and the proportion of research and development investment in sales revenue reached 16.48 percent.

However, not all enterprises have such courage and strength.

Data show that in the first half of this year, 21 listed companies in the biopharmaceutical industry invested more than 100 million yuan in research and development, 26 companies accounted for more than 10% of operating income. Comparing the data, the total investment in research and development of 81 listed companies increased year-on-year, and the total investment in research and development of nine companies increased by more than 50 million yuan year-on-year.

Reporters noted that when innovation became the main theme of biomedicine, 22 companies invested less than 10 million yuan in research and development, 14 companies' total investment in research and development accounted for less than 1% of operating income. In the future, how these companies build their competitiveness will also be the focus of investors' attention.