Event: on April 8, 2022, Guangdong Pharmaceutical Trading Center issued the notice on publicizing the proposed winning / alternative results of centralized procurement of proprietary Chinese medicines such as Guangdong alliance Qingkailing, and announced the winning results of 53 varieties and 361 specifications.
High enthusiasm for reporting volume and wide coverage. 1) The scope of centralized mining involves Guangdong, Shanxi, Henan, Hainan, Ningxia, Qinghai and other provinces, of which the reported volume of Guangdong Province accounts for 64%, and the total reported volume of other provinces accounts for 36%. The reported volume of Guangdong Province is actively higher; 2) The procurement entities include all public medical institutions (including military medical institutions), designated social medical institutions and designated pharmacies in the alliance area. The procurement volume in the first year is less than 3.595 billion (tablets / tablets / bags / PCS), of which the reported volume of public medical institutions accounts for 94%, the reported volume of designated pharmacies accounts for 4%, and the reported volume of social medical institutions accounts for 2%. 3) There are 361 bid winning varieties, with a bid winning rate of 54%, including 249 to be won and 112 to be selected.
The decline of exclusive varieties was small. In terms of varieties, there are 30 exclusive varieties and 23 non exclusive varieties. The overall average decline is 56%, and the bid winning rate is 54%. It is estimated that the average decline of non exclusive products to be bid winning is – 67.8%, and the average decline of exclusive products to be bid winning is – 21.8%. Exclusive varieties are divided into three groups according to the daily consumption amount. Exclusive varieties are divided into ≤ 5 yuan (group 1), 5 yuan and 15 yuan (Group 3)). The decline of exclusive variety group 1 is 18%, the average decline of exclusive variety group 2 is 19.4%, the average decline of exclusive variety group 3 is 24.5%, the average decline of non exclusive group A is 55.3%, and the average decline of non exclusive group B is 84.2%.
From the perspective of listed companies, the decline was better than expected. 1) Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) : Lianhua Qingwen capsule decreased by 1%, better than expected. In addition, the bid winning price of Ginkgo biloba leaves was higher than the previous lowest bid winning price in all provinces, with a price increase of 27.7%; 2) China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) : Shengmai injection was flat, Shenfu injection decreased by 21%, and Brucea javanica oil soft capsule decreased by 37.5%; 3) Chongqing Taiji Industry (Group) Co.Ltd(600129) : Xiaojin tablet benefited from the exclusive dosage form, with a decrease of 15%, which was better than expected; 4) Zhejiang Jolly Pharmaceutical Co.Ltd(300181) : Wuling capsule decreased by 20.7%; 5) Jiangsu Kanion Pharmaceutical Co.Ltd(600557) : Dazhu Hongjingtian capsule decreased by 20.9%, compound Danshen granule decreased by 16.1%, Reduning injection decreased by 14.8%, and the price of Ginkgo biloba leaves was the same; 7) Kpc Pharmaceuticals Inc(600422) : Xuesaitong for injection (lyophilized) decreased by 17%; 8) Renhe Pharmacy Co.Ltd(000650) : Dahuoluo capsule decreased by 1.5%; 9) Zhejiang Conba Pharmaceutical Co.Ltd(600572) : Lanqin granules decreased by 15%.
Investment suggestion: the decline in the centralized purchase of Chinese patent medicines in Guangdong Province is better than expected, and the consumer goods of traditional Chinese medicine have the consumption attribute. They are mainly in the market outside the hospital, which is immune to medical insurance. They continue to be optimistic about the three logics of consumer goods of traditional Chinese medicine: 1) price increase: in recent years, the price of some upstream Chinese herbal medicines has continued to rise, and the cost has been transmitted downstream, driving the price increase of end products, which is expected to increase the performance. Focus on Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) , Beijing Tongrentang Co.Ltd(600085) , Chongqing Taiji Industry (Group) Co.Ltd(600129) , Zhejiang Shouxiangu Pharmaceutical Co.Ltd(603896) Inner Mongolia Furui Medical Science Co.Ltd(300049) , Mayinglong Pharmaceutical Group Co.Ltd(600993) , Shandong Wit Dyne Health Co.Ltd(000915) , Jianmin Pharmaceutical Group Co.Ltd(600976) , etc. 2) Mixed reform of state-owned enterprises: the mixed reform of state-owned enterprises in the traditional Chinese medicine industry and changes at the shareholder level are accelerated, and the performance is expected to be released. Focus on Yunnan Baiyao Group Co.Ltd(000538) , Chongqing Taiji Industry (Group) Co.Ltd(600129) , China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) , etc; 3) Inventory is low: the inventory clearance of some enterprises is coming to an end and entering a new round of distribution cycle. In addition, they are also optimistic about innovative traditional Chinese medicine, exclusive varieties of traditional Chinese medicine base drugs, traditional Chinese medicine formula particles, quality control of traditional Chinese medicine, traditional Chinese medicine medical services, etc. Innovative drugs of traditional Chinese medicine: since 2021, the research and development achievements of innovative drugs of traditional Chinese medicine in China have entered the stage of gradual realization, which is expected to become a new growth point. It is suggested to pay attention to the gradual recovery of ex factory shipments such as Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) and the recovery of performance, with emphasis on Chongqing Taiji Industry (Group) Co.Ltd(600129) , Dong-E-E-Jiao Co.Ltd(000423) and so on.
Risk warning: drug price reduction risk and policy change risk.
