Behind the collective rise in traditional Chinese medicine stocks, the financial Associated Press reporter learned from various interviews that the price of traditional Chinese medicine has shown a general upward trend in recent days. At present, it has been transmitted to the downstream, pushing up the price trend of finished traditional Chinese medicine products; In addition, the policies supporting the traditional Chinese medicine industry have been issued frequently. The rotation of sector valuation, covid-19 specific drugs and the strong consumption attributes of traditional Chinese medicine are all good for the industry trend.
the price rise of medicinal materials pushes up the price of finished traditional Chinese Medicine
On March 2, traditional Chinese medicine stocks rose sharply Several stocks such as Kunming Longjin Pharmaceutical Co.Ltd(002750) ( Jiajia Food Group Co.Ltd(002650) . SZ), Jilin Zixin Pharmaceutical Industrial Co.Ltd(002118) ( Jilin Zixin Pharmaceutical Industrial Co.Ltd(002118) . SZ) and Chongqing Pharscin Pharmaceutical Co.Ltd(002907) ( Chongqing Pharscin Pharmaceutical Co.Ltd(002907) . SZ) increased by more than 5%. The financial Associated Press reporter learned from various interviews that the logic behind the sharp rise in traditional Chinese medicine stocks is not unrelated to the rise in the price of traditional Chinese medicine.
“Recently, the prices of many varieties of traditional Chinese medicine have increased, including Polygonatum yunnanense, safflower, honeysuckle and other traditional Chinese medicine. The main reason is that the large demand for downstream traditional Chinese medicine processing varieties has pushed up the prices of upstream traditional Chinese medicine.” A Chinese herbal medicine manufacturer in Yunnan said in an interview with the financial associated press.
At present, the price rise of traditional Chinese medicine in the upstream has been transmitted to the downstream Yunnan Baiyao Group Co.Ltd(000538) ( Yunnan Baiyao Group Co.Ltd(000538) . SZ) made it clear in the interactive book on March 1 that “the price of traditional Chinese medicine is generally rising. In addition, in view of the increase of various energy consumption, packaging materials and other costs, the company has raised the ex factory price of Yunnan Baiyao Group Co.Ltd(000538) (powder) products after careful study of various factors.” The reporter of the financial Associated Press contacted Yunnan Baiyao Group Co.Ltd(000538) , etc. on the increase of relevant products for many times. As of press time, the other party has not replied yetP align = “center” (Note: some traditional Chinese medicine stocks rose on March 2, from China stock market news)
“Traditional Chinese medicine emphasizes the homology of medicine and food. The upstream traditional Chinese medicine belongs to agriculture. Agriculture is more sensitive to inflation, and the price of traditional Chinese medicine fluctuates greatly.” A relevant person of a listed company of traditional Chinese Medicine analyzed the price fluctuation of traditional Chinese medicine. It is worth mentioning that recently, the State Forestry and grass Administration issued the guide for the development of forestry and grass traditional Chinese medicine industry, saying that the country will be divided into 9 production areas to build a forestry and grass traditional Chinese medicine industry system.
On the market side, a market analyst said: “the traditional Chinese medicine sector began to move again today after adjusting for some time. In fact, the previous wave of rise has fallen back to the range where the previous rise started, which is basically the pattern of bargain hunting.” The financial Associated Press reporter noted that compared with the biomedical sector, the overall valuation of the traditional Chinese medicine sector is relatively low.
A pharmaceutical analyst told the financial associated press that in the long run, the logic behind the traditional Chinese medicine market is not medicine, and the consumption attribute is its logic. The reporter noted that the market also believes that high repurchase rate and consumption stickiness are one of the logic of the rise of traditional Chinese medicineP align = “center” (Note: the trend of market scale of traditional Chinese medicine in recent years comes from Everbright Securities Company Limited(601788) Research Institute)
“The strength of consumption attributes should also be seen by sectors. For example, oral traditional Chinese medicine covers the fields of common diseases and frequently occurring diseases, with a high repurchase rate and strong consumption attributes; however, traditional Chinese medicine injections need to be carried out under professional guidance, and their consumption attributes are relatively weak.” The above Chinese medicine company said.
It is worth mentioning that the market is also quite concerned about the special efficacy of Chinese patent medicine on covid-19 pneumonia, Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) ( Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) . SZ) recently said that relevant research results confirmed that the company’s Chinese patent medicine Lianhua Qingwen can significantly improve the improvement rate of clinical symptoms such as fever, fatigue and cough of covid-19 pneumonia, and significantly improve lung imaging lesions. As of today’s close, Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) closed at 25.02 yuan, up 5.35%.
traditional Chinese medicine favorable policies are frequently issued to enable industrial development
In terms of policies, recently, favorable policies for the traditional Chinese medicine industry have been issued frequently. “In recent years, a series of supporting policies supporting the development of traditional Chinese medicine industry have been introduced from the R & D end to the market end, including the hospital end. For example, at the R & D end, the State Food and Drug Administration issued the implementation opinions of the State Drug Administration on promoting the inheritance, innovation and development of traditional Chinese medicine last year.”
In addition, the continuous expansion of proprietary Chinese medicines in the medical insurance catalogue, the exemption of classic famous prescriptions from clinical practice, and the development of traditional Chinese medicine formula granules have all formed good support for the traditional Chinese medicine industry. The financial Associated Press reporter learned that 6 of the 33 class I innovative drugs approved in 2021 were Chinese patent drugs, which is the peak of the approval of class I innovative traditional Chinese medicine since 2016P align = “center” (Note: some policies of traditional Chinese medicine have been sorted out in recent years, which comes from Everbright Securities Company Limited(601788) Research Institute)
Soochow Securities Co.Ltd(601555) analyst Zhu Guoguang pointed out in the research report that the state has made great efforts to support the traditional Chinese medicine industry. In 2021, the number of CDE traditional Chinese medicine acceptance numbers increased from more than 400 in 2020 to more than 1200 in 2021; Ensure the quantity of traditional Chinese medicine varieties entering the base medicine; In addition, traditional Chinese medicine has congenital advantages in the treatment of non diseases, and the treatment of non diseases has risen to the national strategy.
In terms of volume procurement, the discount rate of proprietary Chinese medicines, especially exclusive proprietary Chinese medicines, relative to chemical drugs and generic drugs is low, which also exceeds the market expectation to some extent. According to the financial Associated Press reporter, in the centralized purchase of Chinese patent medicines carried out by the inter provincial alliance of Hubei at the end of last year, the average price drop of the products to be selected was only 42.27%, far lower than the average decline of the recent batch of national centralized purchase of drugs. Chinese medicine companies told the financial associated press that the decline of exclusive Chinese patent medicine was smaller, between 30% – 40%.
In terms of the future market space of Chinese patent medicine, the above industry analysts believe that at present, Chinese patent medicine accounts for only about 20% in the market. With the superposition of favorable policies and other factors, the market development space is relatively broad.
