In recent years, the pharmaceutical industry has continuously issued new policies, such as the supplement of medical insurance catalogue and the national centralized purchase with quantity, which affect people’s attention to the pharmaceutical industry. However, a series of cost control measures and the price rise of raw materials also put pressure on the performance of pharmaceutical enterprises Guangdong Jiaying Pharmaceutical Co.Ltd(002198) ( Guangdong Jiaying Pharmaceutical Co.Ltd(002198) . SZ) the profit of 2021 decreased by more than 90% year-on-year, and the net profits of Q2 and Q4 showed losses. “Many Chinese herbal medicine suppliers have increased their prices several times since last year,” the associated press said
Guangdong Jiaying Pharmaceutical Co.Ltd(002198) annual report shows that the operating revenue in 2021 was 575 million yuan, an increase of 5.5% year-on-year; Net profit attributable to parent company and net profit deducted from non parent company were 1477300 yuan and 282100 yuan respectively, with a year-on-year decrease of 92.55% and 98.59%. In terms of single quarter net profit, Q1 to Q4 were 7.7644 million yuan, -3.5786 million yuan, 308800 yuan and -3.073 million yuan respectively.
Guangdong Jiaying Pharmaceutical Co.Ltd(002198) is mainly engaged in the R & D, production and sales of Chinese patent medicines. The company said that the pressure on net profit was mainly affected by the sharp fluctuation of the price of traditional Chinese medicine. Some of the main raw materials, including woodlouse worm and Isatis indigotica, rose in different ranges. The price of Chinese herbal medicine increased to a certain extent, which increased the company’s manufacturing cost and increased the pressure of the company’s performance.
The reporter searched several traditional Chinese medicine procurement platforms and communicated with merchants in Kunming, Yunnan, Mazhou, Anhui and Lanzhou, Gansu. It was found that traditional Chinese medicine showed a general upward trend as a whole.
“The price fluctuation is not big, but it is rising.” A manufacturer of Radix Isatidis said that the Radix Isatidis we planted is supplied to pharmaceutical factories after drying. Generally, large goods are sold in tons. The price is basically about 9 yuan per kilogram. The quotation for a small amount of purchase will be higher, more than 10 yuan per kilogram.
According to the merchant, Banlangen has the supply of “as long as the front root”, “no root” and “root, rod and leaf as a whole”. The product specifications and requirements are different. The price naturally varies with different goods. If the price per kilogram is close to more than 20 yuan as long as the root, the price of “root, rod and leaf as a whole” will be slightly cheaper. According to the planting cycle, the price is also different. If the years are long (two-year, three-year, four-year, etc.), the drug content is higher and the price will be more expensive.
Another supplier of Radix Isatidis revealed that “the price of Radix Isatidis has not doubled, but it has also increased. The prices of” unified goods “(different sizes, not screened) and” selected goods “(fine screening) of Radix Isatidis root medicinal materials are different. Now the price per kilogram is more than 30 yuan and more than 40 yuan.”
As a kind of Chinese herbal medicine, woodlouse worm has the effect of removing blood stasis and reinforcing tendon. Seven kinds of products of the company, including bone healing tablets and blood stasis removing capsules, are used for bone healing and other functions. It is used for traumatic injury, continuous tendon and bone connection, blood stasis and pain. The product category achieved a revenue of 400 million yuan in 2021, accounting for 69.64% of the company’s total revenue. From 2018 to 2020, the revenue accounted for 66.14%, 68.52% and 66.12% respectively, making a large contribution to the company’s performance for a long time.
Chinese herbal medicine planting cooperative business told the Associated Press reporter that in fact, since last July and August, woodlouse worm began to rise in price. The epidemic impact is on the one hand, in addition, there is no source of production, production and labor costs increase, and production capacity has declined. Last year’s price has not been bought this year, and 90% of Chinese herbal medicines have gone up. The price of woodlouse worm has nearly doubled. Reporters learned that, last year, woodlouse insect market price per kilogram 65 yuan -90 yuan, at present, the price per kilogram is 110 yuan -150 yuan.
Huaan Securities Co.Ltd(600909) research report points out that the price index of traditional Chinese medicine has been increasing since 2019. Especially after 2020, seasonal factors, cyclical factors, multi factor expansion of supply gap and other factors have boosted the price. On the whole, the price of traditional Chinese medicine is still rising this year. The person in charge of sales of a Chinese herbal medicine company said, “the price of Chinese herbal medicine began to rise around the Mid Autumn Festival last year, and the price of Chinese herbal medicine has risen so high this year.” A Chinese herbal medicine supplier revealed that “since last winter, the prices of Angelica sinensis, Codonopsis pilosula and Astragalus membranaceus have increased by about 35%
In addition to the increase in the price of traditional Chinese medicine raw materials putting pressure on the cost side, internal and external factors also have an impact on the company’s performance. It is reported that under the normalization of epidemic prevention and control, the company has experienced the impact of staggered peak power consumption, process change research, board election, shareholder change and so on.
In terms of the overall environment, we are faced with in-depth changes in the industry, clearing of production capacity, accelerating the frequency of policy introduction, and the inclusion of Chinese patent medicines into centralized procurement. In particular, the new edition of Chinese pharmacopoeia in 2020 is aimed at Chinese herbal medicines, which is standardized in terms of basic source, function and indications, content restrictions of active ingredients, etc., and the implementation of relevant standards accelerates the contraction of the supply of Chinese herbal medicines. However, overall, opportunities still exist. The increase of the elderly population and the further awakening of people’s health awareness under the post epidemic situation, coupled with the support of the top-level supporting policies of traditional Chinese medicine, will drive the growth of the demand for relevant drugs.
Everbright Securities Company Limited(601788) research report mentioned that “judging that this wave of price rise cycle of traditional Chinese medicine is expected to continue to the second half of 2023 under the background of the new pharmacopoeia and the expansion of downstream market.”
