Main points:
Continue to think about the investment logic of traditional Chinese medicine, and the changes in the industry deserve more attention. Our team released 36 pages of in-depth report on brand traditional Chinese medicine industry – national medicine treasure, brand is king on December 20, 2021, which is the first comprehensive and systematic in-depth report on brand traditional Chinese Medicine in the market in recent years.
Then, the price of drugs in Liaoning Province increased dynamically. On December 21, Liaoning Provincial Public Resources Trading Center issued the notice on publicizing the proposed price increase in the dynamic adjustment of drug online prices. We interpreted the notice for the first time and further explained the investment value of traditional Chinese medicine. On the 21st, we once again refined the current investment value of the traditional Chinese medicine industry and mentioned four changes in the current traditional Chinese medicine industry: 1. Friendly policy; 2. Many companies have equity incentive; 3. Price increase of some products; 4. The general valuation is low, about 15 times, with a margin of safety. In terms of product price increase, there are some as follows: Chongqing Taiji Industry (Group) Co.Ltd(600129) the ex factory price of Huoxiang Zhengqi oral liquid has been adjusted recently, with an average increase of 12%; Beijing Tongrentang Co.Ltd(600085) the sales price of Angong Niuhuang Pill (3G * pill / box) was raised from 780 yuan to 860 yuan, an increase of about 10%, which will be implemented on December 1; China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) the ex factory price of Angong Niuhuang Pill also increased in 2021.
In sorting out the investment targets, we also noticed the opportunities brought by the approval of innovative traditional Chinese medicine. In 2021, 11 new Chinese medicine drugs have been approved. According to the statistics of Yao Zhi, as of December 16, In 2021, 58 applications for registration of new traditional Chinese medicine drugs were accepted (accepted number), with a year-on-year increase of 114.81%; both clinical application and listing application have reached a new high over the years, with 48 and 10 respectively. From 2017 to 2020, the number of new traditional Chinese medicine drugs approved each year was 1, 2, 2 and 3 respectively. In the past five years, a total of 19 new traditional Chinese medicine drugs have been approved, of which 8 have been included in the national medical insurance catalogue. In some Under the background of the price increase of traditional Chinese medicine and the rapid approval of innovative traditional Chinese medicine, we reconsidered the previous investment logic. We believe that the beneficiary objects are as follows (not covered yet):
Time honored brands of traditional Chinese medicine: Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) , Yunnan Baiyao Group Co.Ltd(000538) , Beijing Tongrentang Co.Ltd(600085) , Guangyuyuan Chinese Herbal Medicine Co.Ltd(600771) etc;
High brand added value: China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) , Jianmin Pharmaceutical Group Co.Ltd(600976) , Jiuzhitang Co.Ltd(000989) , Henan Lingrui Pharmaceutical Co.Ltd(600285) etc;
Featured brands: Dong-E-E-Jiao Co.Ltd(000423) , Mayinglong Pharmaceutical Group Co.Ltd(600993) , Renhe Pharmacy Co.Ltd(000650) , Hubei Jumpcan Pharmaceutical Co.Ltd(600566) , Guizhou Sanli Pharmaceutical Co.Ltd(603439) , etc.
Innovative traditional Chinese medicine: Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Jiangsu Kanion Pharmaceutical Co.Ltd(600557) , Tasly Pharmaceutical Group Co.Ltd(600535) , Hunan Fangsheng Pharmaceutical Co.Ltd(603998) .
Market Review
This week, the pharmaceutical biological index rose 0.53%, outperforming the Shanghai and Shenzhen 300 by about 1.21 percentage points, outperforming the Shanghai Composite Index by 0.93 percentage points, and ranking 10th in terms of rise and fall in the industry. Since the beginning of 21 years, the pharmaceutical industry has fallen by 8.62%, 16.42 percentage points lower than the market, and the rise and fall of the industry ranks 23rd. PE in the pharmaceutical industry was 32.3 times this week. In the pharmaceutical sub industry, four sub industry sectors rose and two sub industry sectors fell this week. Traditional Chinese medicine was the sub industry with the largest increase, up about 9.41%. Medical services was the sub industry with the largest decline, down about 5.70%. The sub industry with the highest valuation this week is medical services, and PE (TTM) is 66.18 times.
