The A-share traditional Chinese medicine sector continued to be popular. Although affected by the overall correction of the market in the past two trading days, the cumulative increase of the traditional Chinese medicine index since November 2021 is still as high as 16%, more than 90% of the stocks in the sector rose, and the three stocks Gansu Longshenrongfa Pharmaceutical Industry Co.Ltd(300534) , Kunming Longjin Pharmaceutical Co.Ltd(002750) , Jinghua Pharmaceutical Group Co.Ltd(002349) doubled.
In order to explore the rising motivation and sustainability of this round of market, the reporter of Securities Times visited the offline traditional Chinese Medicine Museum and interviewed a number of insiders. it is found that the continuous price rise of traditional Chinese medicine has not been fully transmitted to the consumer terminal, and there may be price increase expectations in the follow-up patent medicine market; The continuous overweight of policies, the gentle landing of centralized procurement and the double prosperity of application and approval of new drugs make people in the industry generally optimistic about the industrial development. Many people in the industry believe that the medium and long-term upward development trend of the traditional Chinese medicine industry has been determined, but the long-term trend of the industry will still be differentiated.
the price of traditional Chinese medicine has increased significantly
Due to the comprehensive influence of climate, epidemic situation, labor, logistics, supervision and other factors, the price of raw materials of traditional Chinese medicine has continued to increase in recent two years, especially the rare wild medicinal materials.
According to the data of Chinese herbal medicine tiandi.com, the demand for Chinese herbal medicine was strong at the end of the year. The comprehensive index of Chinese herbal medicine (Comprehensive 200 index) rose for four consecutive months from August to December 2021, with an annual increase of 9%, exceeding the increase of 5% in 2020. At the end of the year, the prices of Sophora japonica, licorice, aconite, Cyperus, aster, Trichosanthin and other varieties increased significantly.
The price and quality of medicinal materials are closely related to the place of origin. The prices of medicinal materials from different places of origin vary greatly. Taking Northeast China as an example, the prices of most medicinal materials increased significantly in 2021, but there were also varieties that fell. The highest increase in the whole year was Liaoning guanhuangbai. The price at the end of the year was as high as 45 yuan / kg, more than double the 22 yuan / kg at the beginning of the year. Under the rising market all the way, there is still a shortage of Guan Huangbai in Tieling, Liaoning.
Wild varieties also increased significantly last year. The wild 99 index of tiandi.com of traditional Chinese medicine increased by 11% in 2021. Among them, peppermint increased by nearly 40% in one year, and varieties such as Baiwei, Pinellia ternata, white fresh skin and Golden Cherry also increased by more than 20%.
take Golden Cherry as an example, since the picking began in August last year, the price rise has run through the whole harvesting process. Jinyingzi is mainly wild, and most of the raw goods are purchased by the winery for the production of health wine. At the end of 2021, the production price of Jinyingzi in the current production area was between 12-13 yuan per kilogram, about 30% higher than that in the same period of last year, and the price of dry goods in the middle and later period also reached a historical high of 26 yuan / kg.
According to the analysis, the price rise of Rosa laevigata is mainly affected by the weather in the producing area. The frost at the end of 2020 caused the freezing of Rosa laevigata trees in Jiangxi and other places. In 2021, Rosa laevigata was affected by more rain in Hubei and other places during its flowering period, resulting in a sharp decline in the national output of Rosa laevigata at the end of the harvest period. Coupled with the strong demand of the winery, the situation of Jinyingzi in short supply is becoming more and more tense.
However, in recent years, with the progress of technology, there are more and more varieties of wild medicinal materials turning to family planting, and the market price of medicinal materials is more and more affected by the area of family planting. Attracted by the general rising market of traditional Chinese medicine, farmers have increased the planting area, the market supply has increased, and the price rise trend of some medicinal materials has pressed the pause button.
Take dangshen as an example. Xuancheng, Anhui Province is one of the centralized suppliers of Codonopsis lanceolata in China. At present, the source of origin is sufficient and the price has stabilized; Dingxi, Gansu Province is also a high producing area of Dangshen. Recently, with the large-scale listing of new products, the price has also ended the upward trend. According to statistics, at present, the trading price of small pieces of Codonopsis pilosula from the origin is between 40-42 yuan per kilogram, the trading price of medium pieces is between 47-50 yuan, and the trading price of large pieces is between 60-70 yuan.
is not fully conducted to the terminal
Due to the homology of medicine and food and other factors, traditional Chinese medicine has the dual attributes of medicine and consumption. The rise in the price of raw materials will transfer the cost to consumers by improving the terminal patent medicine. However, from the results of the reporter's investigation, the current general rise of traditional Chinese medicine has not been fully transmitted to the end consumer market.
On the afternoon of January 5, the reporter of the securities times came to the National Medical Museum of Jiuzhitang Co.Ltd(000989) which focuses on traditional Chinese medicine. As far as the eye can see, the entrance and exit of the antique museum are mostly white haired old people. Within 10 minutes of the reporter's observation, five old people filled the prescription. A middle-aged man shouted, "look at Dendrobium candidum.".
Will the collective soaring prices of traditional Chinese medicine promote the chain reaction of traditional Chinese medicine consumption terminals and generally raise prices? "No," the staff of the National Medical Museum told the securities times that at the beginning of 2022, although the supply price of more than a dozen traditional Chinese medicines such as Codonopsis pilosula, Radix Paeoniae Alba and Ligusticum chuanxiong increased by 10% - 25%, the price increase range and range of terminal bulk medicinal materials were not large.
take Codonopsis pilosula, which has increased greatly in traditional Chinese medicine, as an example. The price of second-class Codonopsis pilosula tablets was previously 0.13 yuan / g, but now it has been raised to 0.15 yuan / g, an increase of about 15%. Moreover, the price of other grades of Codonopsis pilosula has not been raised. at the same time, the range of other bulk medicinal materials with price increases is 5% - 10%. In addition, because there is less actual demand for a certain Chinese medicinal material in a pair of drugs, this increase is not "obvious" when consumers pay the bill.
Three old people who are buying traditional Chinese medicine in the museum told reporters: "I don't feel that the price of bulk traditional Chinese medicine has risen a lot". The staff of the above-mentioned national medical museum also said that it is also possible that the price rise of traditional Chinese medicine is lagging behind to bulk traditional Chinese medicine, and there may be price increases later.
Subsequently, the reporter visited two chain pharmacies, which was basically consistent with the situation of Jiuzhitang Co.Ltd(000989) national drug store, and the retail price of bulk medicinal materials fluctuated little.
most of the price increases are star drugs
With the rise in the price of raw materials, some pharmaceutical enterprises have also issued a notice of drug price rise. However, compared with the general rising market of more than 1000 kinds of raw materials, there are not many varieties of patent medicines that have announced price increases. On the whole, the average price increase in the patent medicine market is far less than that of raw materials. And the reporter found that the varieties that have announced price increases are mostly star drugs, and the price increases are mostly between 10% - 20%.
Among the listed pharmaceutical enterprises, the first one to raise the price is Beijing Tongrentang Co.Ltd(600085) Angong Bezoar Pill. In early December last year, the price was raised to 860 yuan / box, an increase of nearly 10%, driving the share price of Beijing Tongrentang Co.Ltd(600085) to a new high. At that time, an insider also exclaimed to the reporter, "I feel that these time-honored traditional Chinese medicine will become a luxury". For more information, please stamp "860 yuan a box, traditional Chinese medicine turns into luxury? Beijing Tongrentang Co.Ltd(600085) " divine medicine "Angong Niuhuang Pill rises by 10%! Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) do you follow?"
Soon after, China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) said on the interactive platform that due to the rising overall cost in recent years, the ex factory price of Angong Niuhuang Pill has increased this year. Chongqing Taiji Industry (Group) Co.Ltd(600129) also said on the interactive platform that due to the continuous rise in the costs of main raw materials, auxiliary materials and energy, in order to alleviate the rising pressure of costs, the ex factory price of Huoxiang Zhengqi oral liquid has been adjusted recently, with an average increase of 12%.
will the Chinese patent medicine with stronger consumption attribute usher in the price rise tide under the price increase demonstration of Beijing Tongrentang Co.Ltd(600085) , China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) and other companies?
Jiuzhitang Co.Ltd(000989) has "followed up". The reporter learned from Jiuzhitang Co.Ltd(000989) that the company officially issued a price adjustment notice to customers on January 1, raising the supply price or recommended retail price of 21 Chinese patent medicines including Angong Niuhuang Pill, Liuwei Dihuang pill and Xiaoyao Pill, with a price adjustment range of 6% - 30%, of which the price increase range of three specifications of Angong Niuhuang Pill is between 12% - 25%, The price of Liuwei Dihuang pill, which accounts for the largest proportion of OTC product revenue, increased by 10%.
The relevant person in charge of Hunan Fangsheng Pharmaceutical Co.Ltd(603998) also said that considering the pressure of downstream and terminal, the company has raised the price of some proprietary Chinese medicines by a small margin.
However, an anonymous drug distributor believes that it is unlikely that the price of Chinese patent medicines will be raised in an all-round way. "On the one hand, there is no room for price increase for Chinese patent medicines entering the centralized purchase; on the other hand, most traditional Chinese medicine manufacturers do not have the ability to raise prices." According to the terminal data obtained by the person, most of the recently raised prices of Chinese patent medicines are star varieties of brand pharmaceutical enterprises, accounting for about 10% of the total categories of Chinese patent medicines.
It is noteworthy that the sales data of traditional Chinese medicine at many drug sales terminals have not been "changed" due to the soaring price of traditional Chinese medicine, and the sales situation of Chinese patent medicine with both volume and price has not appeared yet. "
Jiuzhitang Co.Ltd(000989) Dong Secretary Han Chenxiao's view is that Chinese herbal medicines are cyclical. This price rise is jointly affected by planting area, extreme weather, downstream demand and the reduction of supply caused by the national improvement of herbal medicine standards, "It is expected that the price rise will continue for some time, and the price of medicinal materials may be differentiated in the later stage. It is expected that the price of some medicinal materials with strong demand and unable to increase rapidly in the short term will continue to rise."
"The impact on traditional Chinese medicine enterprises is mainly to increase the production cost of drugs." Han Chenxiao said that in view of the sharp rise in the price of traditional Chinese medicine, Jiuzhitang Co.Ltd(000989) took measures to strengthen the monitoring and judgment of the price of raw materials, flexibly control procurement and inventory, reduce cost and efficiency, reduce production costs, appropriately adjust drug prices and strengthen product sales.
policy continues to increase
Although there are few price raising products in the patent medicine market, the A-share traditional Chinese medicine sector still ushered in an explosive cross year market recently. The traditional Chinese medicine sector rose sharply on the last trading day before New Year's day and the first trading day after the festival in 2022. Although affected by the overall market correction on January 5 and 6, the wind traditional Chinese medicine index has increased by 16% since November 2021.
How hot is the market? Since November 1, 2021, 73 of the 79 constituent stocks in the A-share traditional Chinese medicine sector have increased, with an average increase of 31.55% and a median increase of 25.4%. In terms of individual stocks, Gansu Longshenrongfa Pharmaceutical Industry Co.Ltd(300534) , Kunming Longjin Pharmaceutical Co.Ltd(002750) , Jinghua Pharmaceutical Group Co.Ltd(002349) doubled, Jianmin Pharmaceutical Group Co.Ltd(600976) , Tianjin Chase Sun Pharmaceutical Co.Ltd(300026) , Hubei Jumpcan Pharmaceutical Co.Ltd(600566) , Datang pharmaceutical, Zhuzhou Qianjin Pharmaceutical Co.Ltd(600479) , Zhejiang Xinguang Pharmaceutical Co.Ltd(300519) , Zhejiang Jolly Pharmaceutical Co.Ltd(300181) , Henan Lingrui Pharmaceutical Co.Ltd(600285) , Yabao Pharmaceutical Group Co.Ltd(600351) , China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) , Beijing Tongrentang Co.Ltd(600085) , Guiyang Xintian Pharmaceutical Co.Ltd(002873) and many other stocks rose by more than 50%.
Wang Jun (a pseudonym), a senior analyst in the pharmaceutical industry, told reporters that from the point of view of the start-up of the market of traditional Chinese medicine, this round of sharp rise was mainly due to the comprehensive impact of three good news: first, the centralized purchase and landing of Chinese patent medicines; second, many companies in the industry announced price increases; Third, the incentive policy of traditional Chinese medicine continued to increase.
On the last trading day before New Year's day, the State Medical Security Bureau and the State Administration of traditional Chinese Medicine issued the guiding opinions of the State Medical Security Bureau and the State Administration of traditional Chinese medicine on medical insurance supporting the inheritance, innovation and development of traditional Chinese medicine, promoted a number of measures at the policy side to support and promote the development of the traditional Chinese medicine industry, and pushed the enthusiasm of the sector to a climax.
The guiding opinions pointed out that qualified TCM medical institutions and TCM retail pharmacies should be included in the fixed-point agreement management of medical insurance in a timely manner; Timely bring qualified designated TCM medical institutions into the fixed-point scope of direct settlement for medical treatment in other places, so as to improve the regional radiation power of TCM medical institutions; The designated Chinese medicine institutions that carry out Internet treatment and treatment will, after signing supplementary agreements with the regional health insurance agencies, provide the Internet plus Chinese medicine services into the scope of medical insurance payment. In addition, the Guiding Opinions also introduced corresponding policies in terms of medical insurance payment scope, payment policy, fund supervision and so on.
Hunan Fangsheng Pharmaceutical Co.Ltd(603998) secretary he Shi believes that the recent sharp rise in traditional Chinese medicine stocks must be related to the recent national policies on the traditional Chinese medicine industry, such as the outline of the "healthy China 2030" plan and the opinions on Further Strengthening the work of traditional Chinese medicine in general hospitals and promoting the coordinated development of traditional Chinese and Western medicine The State Council's leading group for deepening the reform of the medical and health system issued the implementation opinions on deepening the reform of the medical and health system by deeply popularizing the experience of Sanming City, Fujian Province, which are conducive to the long-term development of traditional Chinese medicine.
medium and long-term trend inflection point is now
The continuous overweight of the policy gave the market confidence. Many industry insiders, including securities analysts and heads of pharmaceutical enterprises, said that "the inflection point of the medium and long-term trend of traditional Chinese medicine has emerged".
From the data, the development speed of the market scale of traditional Chinese medicine is obvious to all. According to the Euromonitor report, China's Chinese patent medicine market grew rapidly from 2015 to 2019, and the market scale increased from about 625.2 billion yuan in 2015 to about 814.9 billion yuan in 2019, with a compound annual growth rate of about 6.8%.
On the payment side, the price reduction of traditional Chinese medicine in medical insurance negotiation is relatively mild. According to statistics, the proportion of traditional Chinese medicine included in medical insurance increased year by year from 2017 to 2020. In 2021, the bid winning rate of traditional Chinese medicine (84%) was higher than that of Western Medicine (53%). Meanwhile, the policy on traditional Chinese Medicine issued in December 2021 gives guidance on the inclusion of traditional Chinese medicine institutions and traditional Chinese medicine medical insurance, and points out that traditional Chinese medicine institutions can temporarily not implement DRG payment (group payment according to disease diagnosis). Obviously, the policy support for the development of traditional Chinese medicine has not been reduced at all, and the scale of traditional Chinese medicine market is less affected by the cost control of medical insurance.
Han Chenxiao said that the continuous introduction and implementation of national and regional support policies for traditional Chinese medicine, consumers' recognition of traditional Chinese medicine, and the expectation of improving the profitability of traditional Chinese medicine enterprises caused by the rise in the price of OTC proprietary Chinese medicine have led to a sharp rise in the traditional Chinese medicine sector. "From a fundamental point of view, the market of traditional Chinese medicine stocks should be the beginning of medium and long-term valuation repair." Han Chenxiao believes that the traditional Chinese medicine industry has ushered in good development opportunities. In the future, enterprises with brand advantages and market advantages, focusing on product quality, product effectiveness and other scientific research will develop better.
"I feel optimistic about the overall trend of the traditional Chinese medicine industry," he Shi said. The first reason is the improvement of national and cultural self-confidence from the country; Especially after the epidemic, the country's general health needs for the whole people; At the same time, the aging of China's population and the policy preference of Rural Revitalization in the cultivation of traditional Chinese medicine will open the way for the development of traditional Chinese medicine industry.
Many people in the industry told the securities times, "at this stage, the proportion of short-term speculation is large, and the overall market rise is very large, which comes from the centralized collection and landing of Chinese patent medicines and the rise in the price of Chinese herbal medicines. However, after a number of Chinese herbal medicine policies have been issued one after another, medium and long-term funds are also entering one after another. After chip adjustment and exchange, the value investment in the evolution growth period is a high probability event."
The research report points out that valuation and chips are the main drivers of the short-term market of traditional Chinese medicine. Since 2014, due to its own development reasons and the influence of various fee control and restriction policies, the valuation of traditional Chinese medicine once had a discount of more than 40% compared with that of medicine as a whole. With the three-year structural market entering the valuation digestion period, the allocation value of the traditional Chinese medicine sector with valuation cost performance and highly dispersed chip distribution is highlighted at the transaction level. Under the "filling depression" effect, the plate has also ushered in a wave of rapid valuation repair.
Minsheng securities analysts believe that traditional Chinese medicine varieties, brands and patent barriers are high, and exclusive products are scarce. In recent years, the internal operation and management of many traditional Chinese medicine enterprises have been improved, and the retail marketing reform and channel improvement have increased product sales performance. In 2020, many listed traditional Chinese medicine companies have issued equity incentive and employee stock ownership plans. The annual growth rate of performance is required to be concentrated at 10% - 20%. The development speed of the industry has been guaranteed, the upward space has been fully opened, and the valuation is expected to continue to improve.
speed up the approval of innovative traditional Chinese medicine
Guotai Junan Securities Co.Ltd(601211) analysts believe that the long-term trend of the traditional Chinese medicine industry will still be differentiated. The general direction of the market policy in the hospital is still close to the medical logic. The long-term model based on Demographic Economics is a hard indicator of medical insurance control. From the policy context of the past few decades, the policies that have been fully tested for positive effects will not change significantly; In the out of hospital market, under the background of consumption upgrading in the field of general health, relying on the original brand advantages or the scarcity of resource categories, enterprises with long-term pricing ability and good supply-demand relationship will also continue to have good development prospects.
The prospect of innovative traditional Chinese medicine is still promising. Among the driving factors of this round of soaring market, there are also some reasons from the accelerated approval of innovative traditional Chinese medicine. The number of innovative traditional Chinese medicines, whether declared for registration or approved, reached a new high in 2021.
From the perspective of the declared innovative traditional Chinese medicine projects, the number of clinical applications increased year by year from 2019 to 2021. The proportion of clinical applications for innovative traditional Chinese medicine in 2021 was 65%, twice that in 2020 and about five times that in 2019. The proportion of improved traditional Chinese medicine, compound preparation and drugs with the same name and formula tends to decrease, and the proportion of innovative traditional Chinese medicine increases.
From the acceptance end, there are more than 1200 TCM acceptance numbers of the drug administration in 2021, three times that of 2020 (more than 400). From the approval end, 20 new traditional Chinese medicine drugs were approved in 2016-2021, of which 12 were approved in 2021, more than the sum of 2017-2020. The newly approved innovative proprietary Chinese medicine covers many fields such as respiration, nerves and digestion.
Han Chenxiao believes that the above policies have opened up the market rising space of the traditional Chinese medicine industry. In the future, some encouragement and support should be given to traditional Chinese medicine enterprises in using modern science for research or R & D. He believes that there are three directions for the innovation of traditional Chinese medicine enterprises: one is to further excavate traditional classic prescriptions; the other is to excavate new drug prescriptions from the treatment practice of traditional Chinese medicine and optimize and verify them with modern scientific methods; the third is to improve the taking methods of traditional Chinese medicine and develop dosage forms more suitable for modern people.
He Shize said that the policy can support the innovation of traditional Chinese medicine in two aspects. On the one hand, more attention should be paid to the clinical value in the approval of innovative traditional Chinese medicine, and the registration and evaluation of similar drugs should not be disorderly; Second, for innovative drugs in line with national policies, form executable policy documents that clearly open the access window of medical institutions.
(Securities Times)
