Key points:
Traditional Chinese Medicine II fell 0.11% last week, and the pharmaceutical sector continued to show a callback trend
Last week, pharmaceutical biology closed at 10977.64 points, down 2.34%; Traditional Chinese Medicine II closed at 7553.63 points, down 0.11%; Chemical pharmaceutical closed at 11572.42 points, down 1.94%; Biological products closed at 12758.76 points, up 0.48%; Pharmaceutical business closed at 5976.36 points, down 1.46%; Medical devices closed at 9513.59 points, down 0.41%; Medical services closed at 12012.36 points, down 7.43%. The pharmaceutical sector continued to show a callback trend, with only biological products rising and traditional Chinese medicine falling the least.
From the performance of Companies in the traditional Chinese medicine sector, the top companies are: Hubei Jumpcan Pharmaceutical Co.Ltd(600566) , Jianmin Pharmaceutical Group Co.Ltd(600976) , Guangyuyuan Chinese Herbal Medicine Co.Ltd(600771) , Henan Lingrui Pharmaceutical Co.Ltd(600285) , Jiuzhitang Co.Ltd(000989) ; Companies with low performance include: Kangmei Pharmaceutical Co.Ltd(600518) , Guangdong Jiaying Pharmaceutical Co.Ltd(002198) , Dong-E-E-Jiao Co.Ltd(000423) , Guizhou Yibai Pharmaceutical Co.Ltd(600594) , Shanxi Panlong Pharmaceutical Group Limited By Share Ltd(002864) .
Traditional Chinese medicine PE (TTM) decreased by 0.24x month on month, while Pb (LF) remained unchanged month on month
Last week, the PE of traditional Chinese medicine plate was 32.27x, the maximum value of PE in recent year was 39.7x and the minimum value was 28.78x; The current Pb is 3.04x, the maximum value of Pb in recent year is 3.48x, and the minimum value is 2.57x. PE in the traditional Chinese medicine sector decreased by 0.24x month on month, while Pb was flat month on month. The premium rate of traditional Chinese medicine plate relative to Shanghai and Shenzhen 300 was 129.63%.
The market demand for Chinese herbal medicines is improving, the implementation of centralized mining improves the stability of the supply side, and the price is expected to continue to rise
Last week, the total price index of key tracked traditional Chinese medicine was 206.48 points, up 0.8 percentage points month on month. In terms of varieties, the twelve categories showed a year-on-year increase of 11 and a decrease, and the price index of mineral medicinal materials ranked first. The recent increase in demand has led to a significant rise in prices. At present, the demand is good, coupled with the implementation of centralized mining, which improves the stability of the supply side of medicinal materials. It is expected that the price is expected to continue to rise slightly in the later stage.
Last week, two innovative traditional Chinese medicine drugs were approved for listing, and the review and approval of traditional Chinese medicine showed an accelerated trend
Last week, two innovative traditional Chinese medicine drugs were approved for listing, Huzhen Qingfeng capsule (Yili pharmaceutical) and Jieyu Chufan capsule ( Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) ）。 In 2021, 11 new traditional Chinese medicine drugs were approved, including Huzhen Qingfeng capsule, Jieyu Chufan capsule, xuanqijiangu tablet, Qizhi Yishen Capsule, kunxinning granule, Yinqiao Qingre tablet, Yiqi Tongqiao pill, Yishen Yangxin Anshen tablet, and Qingfei Paidu granule, Huashi Baidu granule and Xuanfei Baidu granule approved by the State Drug Administration through the special approval procedure. In 2021, with policy support, the review and approval of new traditional Chinese medicine showed an accelerated trend.
We believe that policy support is the most favorable factor for the development of traditional Chinese medicine industry. Demand side, population aging, chronic diseases, cancer incidence rate rise, disease spectrum changes, as well as residents’ income level raise health awareness, consumption upgrading and other factors to support the demand for Chinese medicine industry healthy and stable growth. On the policy side, the state vigorously supports and promotes the development of traditional Chinese medicine, promotes the inheritance and innovation of traditional Chinese medicine, and adheres to the equal emphasis on traditional Chinese and Western medicine, which has brought policy dividends and new demand to the traditional Chinese medicine industry. The unique advantage of “preventing disease” brings development opportunities to the traditional Chinese medicine industry. On the performance side, the traditional Chinese medicine industry came out of the low point and showed marginal improvement. Although the single quarter performance growth rate decreased slightly in the third quarter of 2021 due to the weakening of the low base effect, it remained in the trend of recovery channel as a whole. On the valuation side, the traditional Chinese medicine industry has obvious absolute valuation advantages. “Policy + consumption upgrading + performance improvement + valuation advantage” jointly constructs investment opportunities for the traditional Chinese medicine industry. It is suggested to pay attention to the areas of policy encouragement and policy haven.
(1) Pay attention to the innovation of modern traditional Chinese medicine and the innovation targets of modern traditional Chinese medicine with strong R & D strength and large categories; (2) pay attention to brand traditional Chinese medicine, formula and raw material advantages, and jointly build a moat of brand traditional Chinese medicine; (3) benefit from consumption upgrading, and pay attention to the targets with industrial chain extension and strong brand advantages.
Risk statement
(1) Stricter industrial policies; (2) performance fluctuation risk of the industry and listed companies.
