Key investment points:
National policies support the development of traditional Chinese medicine. The national policy clearly encourages the development of traditional Chinese medicine. The medical insurance bureau and the administration of traditional Chinese Medicine issued the guiding opinions on medical insurance supporting the inheritance, innovation and development of traditional Chinese medicine in December 2021, pointing out that general traditional Chinese medicine medical service projects can continue to pay by project, traditional Chinese medicine medical institutions will not implement DRG payment for the time being, and for areas that have implemented DRG and pay by disease score, Appropriately improve the coefficient and score of TCM medical institutions and TCM diseases; In November 2021, Guangdong Medical Insurance Bureau issued the guiding opinions of Guangdong Medical Security Bureau on carrying out medical insurance payment to promote the inheritance, innovation and development of traditional Chinese medicine, which stipulated that the provincial medical insurance department uniformly organized experts to select the dominant diseases of traditional Chinese medicine in batches, and paid by disease for the dominant outpatient diseases of traditional Chinese medicine. For outpatient and inpatient diseases with equal emphasis on traditional Chinese and Western medicine, traditional Chinese medicine and corresponding western medicine diseases shall be treated with the same disease and the same price. For outpatient and inpatient diseases mainly treated by western medicine, if characteristic traditional Chinese medicine treatment services are added, the outpatient cost or inpatient score of the disease can be appropriately increased.
The market sales of OTC retail pharmacies of Chinese patent medicine increased steadily. According to the data of China business intelligence network, from 2016 to 2019, the market scale of Chinese patent medicine in China increased from 672.7 billion yuan to 814.9 billion yuan.
From 2013 to 2019, the market sales of proprietary Chinese medicine in physical pharmacies increased from 103.6 billion yuan to 111.6 billion yuan. At the current time point, we believe that some traditional Chinese medicine enterprises have long-term investment opportunities, and the investment sector with low valuation level and stable growth will probably have investment value. It can be divided into four categories:
1) policies encourage the development of prescription Chinese patent medicines. The policy encourages the Guangdong Provincial Health Commission and the Guangdong Provincial Bureau of traditional Chinese medicine to jointly issue the "Supplementary Notice on transmitting the notice on printing and distributing the first batch of national key monitored and rational drug use drug catalogue (chemical and biological products)" in January 2020, proposing to encourage Western doctors to learn Chinese medicine theory and make rational use of Chinese patent medicine; General practitioners and rural doctors in grass-roots medical institutions can issue prescriptions for common and frequently occurring Chinese patent medicines or Chinese herbal pieces, and can continue to use the long-term prescriptions of Chinese patent medicines and Chinese Herbal Pieces issued by traditional Chinese medicine doctors; Those who have obtained the qualification of doctors outside the category of traditional Chinese medicine and registered for practice, and have received the course of traditional Chinese medicine in college education and post graduation education, can issue the prescription of traditional Chinese patent medicine and traditional Chinese medicine in accordance with the guiding principles for the clinical application of traditional Chinese Medicine, the management norms of traditional Chinese medicine in hospitals and the basic dialectical treatment principles of traditional Chinese medicine. This policy of encouraging doctors who have obtained professional qualifications outside the category of traditional Chinese medicine to issue proprietary Chinese medicine and decoction pieces of traditional Chinese medicine according to the regulations is conducive to promoting the rational use of proprietary Chinese medicine by Western doctors, improving the clinical application level of proprietary Chinese medicine and promoting the development of the market.
2) OTC products have independent pricing and the road of price increase is smooth. OTC of Chinese patent medicine has independent pricing power; With the increase in the price of Chinese herbal medicines in the upstream and the increase in the price acceptance of Chinese patent medicines in the downstream pharmacies, the OTC price increase channel of Chinese patent medicines has been smooth in recent years, which is expected to increase profits. With the improvement of consumers' brand awareness and online channel share, the growth of head brands continues to exceed the industry average.
3) new national standard is introduced for formula particles, allowing addition to promote promotion. In April 2021, the State Food and Drug Administration organized the national pharmacopoeia committee to formulate the national standard for traditional Chinese medicine formula granules in accordance with the technical requirements for quality control and standard formulation of traditional Chinese medicine formula granules and the relevant procedures for national drug standard formulation. After standard research and drafting, production verification, standard review, professional committee review, public consultation, review, etc. By taking "standard Decoction" as the benchmark, the "consistency" between formula particles and decoction pieces can be measured to improve the overall quality control level of traditional Chinese medicine. At the same time, different from ordinary drugs, formula particles can be added, which creates a driving force for the promotion of traditional Chinese medicine in hospitals.
4) the policy clearly encourages TCM diagnosis and treatment. Support the development of traditional Chinese medicine from medical insurance policy to medical and health policy. In terms of medical insurance policy support, the State Medical Insurance Bureau and the State Administration of traditional Chinese Medicine issued the guiding opinions on medical insurance supporting the inheritance, innovation and development of traditional Chinese medicine, and proposed to support traditional Chinese medicine institutions to be included in the designated medical insurance; Open up a green channel for new TCM service projects; Traditional Chinese medicine medical institutions may not implement DRG payment temporarily. For areas where DRG / dip has been implemented, the coefficients and scores of traditional Chinese medicine medical institutions and diseases of traditional Chinese medicine shall be appropriately increased; Support grass-roots medical institutions to provide substantive dividend policies such as traditional Chinese medicine services.
Focus on companies that focus on the company: Jianmin Pharmaceutical Group Co.Ltd(600976) { Jianmin Pharmaceutical Group Co.Ltd(600976) , {000000999 {{ Jianmin Pharmaceutical Group Co.Ltd(600976) {{ Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) {{ Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) {{ Yunnan Baiyao Group Co.Ltd(000538) {{{{{{{{{000000999} {000000999} {000999 {000999 China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) {60097287}, Kpc Pharmaceuticals Inc(600422) { Kpc Pharmaceuticals Inc(600422) , { Cofco Sugar Holding Co.Ltd(600737) , Sunflower Pharmaceutical Group Co.Ltd(002737) }, {{ Sunflower Pharmaceutical Group Co.Ltd(002737) , {600600572} {{{ Zhejiang Conba Pharmaceutical Co.Ltd(600572) , {{{60060067000650} {{ Renhe Pharmacy Co.Ltd(000650) Renhe Pharmacy Co.Ltd(000650) Renhe Pharmacy Co.Ltd(000650) , {{002000650 {{002 Tasly Pharmaceutical Group Co.Ltd(600535) , Jiangsu Kanion Pharmaceutical Co.Ltd(600557) Shandong Buchang Pharmaceuticals Co.Ltd(603858) , Guiyang Xintian Pharmaceutical Co.Ltd(002873) , Shanghai Kaibao Pharmaceutical Co.Ltd(300039) , Zhejiang Jolly Pharmaceutical Co.Ltd(300181) , Guizhou Sanli Pharmaceutical Co.Ltd(603439) , Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864) , Guizhou Yibai Pharmaceutical Co.Ltd(600594) , Shanxi Zhendong Pharmaceutical Co.Ltd(300158) , Tianjin Chase Sun Pharmaceutical Co.Ltd(300026) , Chinese traditional medicine, Guangxi Liuzhou Pharmaceutical Co.Ltd(603368) , gushengtang.
The traditional Chinese medicine industry is supported by national policies, the valuation level of the sector is low, the main products have a certain right to raise prices, the growth of relevant companies is determined stably, and the recommended rating is maintained.
Risk warning: the risk of covid-19 epidemic affecting terminal sales; Risk of excessive channel inventory; The risk that the price rise of some products is less than expected; The risk that the improvement of corporate governance structure is lower than expected; The risk that the implementation of the state's policies to encourage the development of traditional Chinese medicine is lower than expected; Focus on the company's performance less than expected.
