The centralized purchase of Chinese patent medicine is an inevitable trend, and Hubei and Guangdong play an exemplary role
From the historical process of centralized mining, it is an inevitable trend for Chinese patent medicine to be included in centralized mining under the trend of expansion and normalization of centralized mining. The Hubei alliance and Guangdong alliance are also the first to start the centralized collection of Chinese patent medicine. The two alliances, one before and one after, formulate rules in combination with the characteristics of varieties and regions, overcome some difficulties in the centralized collection of Chinese patent medicines, and explore the way of centralized collection of Chinese patent medicines. In terms of results, the two major leagues announced (proposed) the results of the election in December 2021 and April 2022 respectively. The average decline in Hubei was 42%, and the winning rate was 62%; Compared with the highest bidding price, Guangdong has an average decline of 56%, the bid winning rate is about 54%, and the average decline of exclusive products is 17%.
Comparative analysis, same and different
Chinese patent medicine vs centralized purchase of chemical medicine: from the comparison of the decline, the average decline of 6 large-scale centralized purchase of chemical medicine is 53%, while the average decline of centralized purchase of Chinese patent medicine in Hubei and Guangdong is 42% and 56% respectively (nominal decline, actual decline may be smaller), especially the decline of exclusive varieties is more limited (17% lower than the highest bid price). It can be seen that the price reduction of centralized collection of Chinese patent medicines is more moderate than that of previous rounds of centralized collection of chemical medicines, and the actual situation of Chinese patent medicines is also taken into account.
Hubei vs Guangdong: the first is the comparison of rules. The two are different in grouping basis, selection ideas, rule design, winning rules and other aspects. It is the method exploration in the early stage of centralized purchase of Chinese patent medicine, which requires more policy research and judgment of manufacturers. Secondly, from the price comparison, according to the summary statistics, the two alliances involve 31 categories of the same products from the same manufacturer, and they are all non exclusive varieties. From the perspective of quotation strategy, 16 products in 31 categories adopt the same quotation strategy. It can be seen that in the two leading centralized purchase quotations of Chinese patent medicines, manufacturers are still trying to follow.
We believe that the trend of normalization in centralized procurement is unchangeable, and manufacturers need more strategies to adapt. On the one hand, we should improve the depth of our products, have a relatively stronger voice and enhance the brand value. For example, the decline of exclusive products in Guangdong is significantly lower than that of non exclusive products. On the other hand, we should expand our product range and strive for greater market space in an innovative way with the help of the tide of the development of traditional Chinese medicine. From another dimension, the out of hospital market (retail end) and upstream market (traditional Chinese Medicine) will not be affected by short-term centralized purchase, which is a new direction for manufacturers to extend and expand.
Returning to traditional Chinese medicine investment, we continue to recommend:
Innovative traditional Chinese medicine:
Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) : Lianhua Qingwen has a moderate decline and does not affect the ex factory price. Lianhua Qingwen plays a significant role in covid-19 prevention, mild and asymptomatic patients. It is a large single product of the company, has been covered and has a buy rating;
Jiangsu Kanion Pharmaceutical Co.Ltd(600557) : Guangdong’s centralized mining benefited from the moderate decline of Reduning. The exclusive bid of Dazhu rhodiola and the bid of Compound Danshen granule brought additional increment, which has been covered and has a buy rating;
Guiyang Xintian Pharmaceutical Co.Ltd(002873) (covered, buy rating), Guizhou Sanli Pharmaceutical Co.Ltd(603439) (covered, buy rating), Tasly Pharmaceutical Group Co.Ltd(600535) , Hunan Fangsheng Pharmaceutical Co.Ltd(603998) etc;
Brand Chinese herbal medicine: brand Chinese herbal medicine:: Tsingtao Brewery Company Limited(600600) 60085 285, Zhejiang Shouxiangu Pharmaceutical Co.Ltd(603896) , Jiangzhong Pharmaceutical Co.Ltd(600750) , Zhejiang Jolly Pharmaceutical Co.Ltd(300181) , Dong-E-E-Jiao Co.Ltd(000423) , Chongqing Taiji Industry (Group) Co.Ltd(600129) Jiuzhitang Co.Ltd(000989) , Mayinglong Pharmaceutical Group Co.Ltd(600993) , Zhuzhou Qianjin Pharmaceutical Co.Ltd(600479) , Teyi Pharmaceutical Group Co.Ltd(002728) , etc;
Ethnic medicine: Guiyang Xintian Pharmaceutical Co.Ltd(002873) (covered, buy rating), Guizhou Sanli Pharmaceutical Co.Ltd(603439) (covered, buy rating), Guizhou Bailing Group Pharmaceutical Co.Ltd(002424) , Tibet Cheezheng Tibetan Medicine Co.Ltd(002287) , etc;
Chinese herbal medicines: Shanxi Zhendong Pharmaceutical Co.Ltd(300158) Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited(600332) , Chinese traditional medicine, Tianjin Chase Sun Pharmaceutical Co.Ltd(300026) etc.
Risk warning: policy uncertainty; Uncertainty of raw material supply fluctuation; Uncertainty of market competition degree; Uncertainty about the progress of the epidemic.
