On December 24, the traditional Chinese medicine sector continued to rise. As of the closing, individual stocks such as Gansu Longshenrongfa Pharmaceutical Industry Co.Ltd(300534) , Tianjin Chase Sun Pharmaceutical Co.Ltd(300026) , Zhejiang Xinguang Pharmaceutical Co.Ltd(300519) , Zhejiang Jolly Pharmaceutical Co.Ltd(300181) , Guizhou Yibai Pharmaceutical Co.Ltd(600594) , Jinghua Pharmaceutical Group Co.Ltd(002349) rose by more than 10%, Longjin pharmaceutical, Lanzhou Foci Pharmaceutical Co.Ltd(002644) , Shanghai Kaibao Pharmaceutical Co.Ltd(300039) , Henan Lingrui Pharmaceutical Co.Ltd(600285) rose by more than 5%, and the sector index rose by more than 4%, ranking first in the industry.
In fact, since the end of October this year, the traditional Chinese medicine sector index has been in a volatile upward trend, and has strengthened significantly in recent days. According to wind information data, in the past two months, 59 of the 70 stocks in the traditional Chinese medicine sector rose, accounting for 84%. Among them, 37 rose by more than 10%, and 15 rose by more than 30%.
Some market stakeholders believe that considering the time factor, this round of rising market of traditional Chinese medicine is not only the result of news stimulation, but also the factors such as enterprise fundamentals and industry have played an important role in promoting the expectations of relevant investors.
Zhao Hui, an analyst at Tibet Jinxiu commodity exchange, told the Securities Daily: “previously, due to the general rise of Chinese herbal medicine raw materials and the sharp decline of centralized purchase prices, the market has strong expectations that the profits of the bid winning enterprises will be reduced to a large extent. However, with the results of this centralized purchase, the price decline of most drugs is small, and the market has a certain return to the previous expectations.”
Basically, according to information data, the total revenue of traditional Chinese medicine in the first three quarters of this year was about 248.298 billion yuan, a year-on-year increase of 10.96%, and the net profit attributable to the parent was about 25.11 billion yuan, a year-on-year increase of 20.45%. Within the sector, in terms of net profit attributable to the parent, only 16 of the 70 stocks in the sector had a negative growth rate, and 38 had a year-on-year growth rate of more than 20%.
Cao Yanyan of Gongjin Enterprise Management Consulting Co., Ltd. said: “based on the good fundamentals of enterprises in the sector, and superimposed since January 2019, due to the unexpected impact of industrial policies and terminal sales data, the traditional Chinese medicine sector has been significantly lower than the pharmaceutical index and other sub sectors. At present, the valuation of traditional Chinese medicine enterprises has a high cost performance.”
According to the data of Kaiyuan Securities Research Report, based on the annualized profit in the first three quarters of this year, the P / E ratio (PE) of the traditional Chinese medicine sector is 27 times, lower than 31 times that of the overall pharmaceutical and biological industry.
In terms of industry, due to the impact of population growth, aging and the improvement of people’s living standards, the demand for traditional Chinese medicine products in China is growing rapidly. According to the data of China traditional Chinese Medicine Association, in 2020, the output value of China’s traditional Chinese medicine industry was about 2 trillion yuan, an increase of nearly 2.6 times compared with about 780 billion yuan in 2015,
In terms of industrial policy support, as an important industry related to the national economy and the people’s livelihood and an important part of China’s strategic emerging industry biomedical industry, with the in-depth implementation of the “healthy China” strategy, the state’s heavy support policies for the traditional Chinese medicine industry continue to increase. In terms of the number of innovative traditional Chinese medicines approved representing the strength of policies, according to incomplete statistics, so far this year, the number of innovative traditional Chinese medicines approved in China has reached 11, a new high in recent five years.
In addition, for the future trend of the traditional Chinese medicine sector, Citic Securities Company Limited(600030) said that in the short term, when the high valuation sector continues to callback at the end of the year, the traditional Chinese medicine sector can be used as a haven for undervaluation and highlight its value. In the long run, the TCM board will continue to benefit from policy promotion, innovative R & D and consumption upgrading.
For individual stocks in the plate, Zhan Fei, Equity Analyst of Zhengzhou Hongheng Investment Consulting Co., Ltd., believes that: “Because OTC varieties of traditional Chinese medicine are similar to food and beverage products, they have obvious consumption attributes. First, they mainly focus on the off-site market, do not occupy medical insurance, and are less affected by centralized mining; second, enterprises have certain independent pricing power and have the expectation of price increase. OTC varieties are the main varieties, the proportion of traditional Chinese medicine injections is low, and the core products have the expectation of price increase of Henan Lingrui Pharmaceutical Co.Ltd(600285) , followed by Kpc Pharmaceuticals Inc(600422) , Jianmin Pharmaceutical Group Co.Ltd(600976) , Mayinglong Pharmaceutical Group Co.Ltd(600993) ” And other pharmaceutical enterprises have great potential. ”
It is reported that Henan Lingrui Pharmaceutical Co.Ltd(600285) is a key high-tech enterprise of the national torch plan focusing on drug production and operation, and it is also the first listed enterprise in the national rubber paste pharmaceutical industry. The main products are patches, capsules, ointments, tablets, etc. This year’s semi annual report shows that Henan Lingrui Pharmaceutical Co.Ltd(600285) main revenue is mainly from OTC channels, and relevant policies such as medical insurance fee control have limited impact on it.
(Securities Daily)
