In the four trading days since 2022, traditional Chinese medicine has become the most attractive sector: the index of traditional Chinese medicine has continued to rise, and many listed companies in the industry have issued stock price change announcements.
On January 7, the market enthusiasm dropped sharply: 25 listed Chinese medicine companies fell by more than 5%, of which Tianjin Chase Sun Pharmaceutical Co.Ltd(300026) , Zhejiang Xinguang Pharmaceutical Co.Ltd(300519) , Zhejiang Jolly Pharmaceutical Co.Ltd(300181) , Shanghai Kaibao Pharmaceutical Co.Ltd(300039) fell by more than 10%, the limits of Jinghua Pharmaceutical Group Co.Ltd(002349) , Kunming Longjin Pharmaceutical Co.Ltd(002750) , Hunan Hansen Pharmaceutical Co.Ltd(002412) , and Jilin Zixin Pharmaceutical Industrial Co.Ltd(002118) , Shandong Wohua Pharmaceutical Co.Ltd(002107) fell by more than 9%.
Hu Qimu, chief researcher of Sinosteel Economic Research Institute, told the Securities Daily that from the perspective of valuation, the traditional Chinese medicine sector is at a historical low, and the current profitability of pharmaceutical enterprises is improving, so there is a demand for valuation repair in the traditional Chinese medicine sector.
In an interview with the Securities Daily, Shi lichen, an expert in pharmaceutical strategic planning, said that the recent rise in share prices of Listed Companies in the traditional Chinese medicine industry was affected by multiple factors. The increase in the market demand for traditional Chinese medicine in winter, coupled with the rise in the price of traditional Chinese medicine, triggered this wave of market. But this round of market is not expected to last long.
shareholders of the company took the opportunity to reduce their holdings
The collective price rise of traditional Chinese medicine has aroused the continuous attention of the market and has also become the fuse for the restlessness of the stock prices of Listed Companies in the pharmaceutical industry.
According to the data of Chinese herbal medicine tiandi.com, among the 110 common varieties with an increase of more than 10% in 2021, there are as many as 21 varieties with an increase of more than 100%, 25 varieties with an increase of 50% to 100%, 33 varieties with an increase of 30% to 50%, 31 varieties with an increase of 10% to 30%, and the prices of more than 35 varieties have reached a record high.
The price rise of traditional Chinese medicine has also triggered the collective price increase of downstream production enterprises, including Beijing Tongrentang Co.Ltd(600085) , China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) , Chongqing Taiji Industry (Group) Co.Ltd(600129) and many other traditional Chinese medicine enterprises have issued product price increase notices.
However, the relevant person in charge of listed companies of traditional Chinese medicine told our reporter, “the types of traditional Chinese medicine materials are relatively diverse. The price of some plant traditional Chinese medicine has increased significantly, while the price increase intention of some mineral traditional Chinese medicine is not obvious.”
Just as the prices of traditional Chinese medicine rose and downstream manufacturers raised prices one after another, the depressed listed companies of traditional Chinese medicine ushered in the “spring” of the secondary market, and the share prices of many listed companies such as Kunming Longjin Pharmaceutical Co.Ltd(002750) , Gansu Longshenrongfa Pharmaceutical Industry Co.Ltd(300534) , Jinghua Pharmaceutical Group Co.Ltd(002349) , Jianmin Pharmaceutical Group Co.Ltd(600976) doubled. With the continuous warming of stock prices, shareholders of many listed companies, including Kunming Longjin Pharmaceutical Co.Ltd(002750) , have thrown out reduction plans, which also “brought down” the stock prices of listed companies.
Kunming Longjin Pharmaceutical Co.Ltd(002750) on January 6, it was announced that the controlling shareholder Kunming Qunxing Investment Co., Ltd. (hereinafter referred to as “Qunxing investment”) planned to reduce its total holdings of no more than 12.015 million shares (accounting for 3.00% of the total shares of the company) by block trading and centralized bidding from January 28, 2022 to July 27, 2022. Fan xianrussia, the actual controller of the company, plans to reduce his holdings of no more than 775000 shares obtained through centralized bidding transactions, accounting for 0.19% of the total share capital of the company.
Kunming Longjin Pharmaceutical Co.Ltd(002750) since December 21, 2021, the share price has continued to rise, from 7.53 yuan / share to the highest price of 21.2 yuan / share on January 6, 2022, with a cumulative maximum increase of more than 180%. The continuous rise of share price means that the total market value of shares of listed companies held by Kunming Longjin Pharmaceutical Co.Ltd(002750) controlling shareholders and actual controllers continues to rise. The total number of shares to be reduced by controlling shareholder Qunxing investment and actual controller fan xianrussia alone has increased by more than 160 million yuan in less than one month.
On January 7, when the shareholders’ reduction plan was announced, Kunming Longjin Pharmaceutical Co.Ltd(002750) shares fell by the limit and finally closed at 17.62 yuan / share.
On January 4, Jinghua Pharmaceutical Group Co.Ltd(002349) announced that the company received the reduction plan from Zhou Yunzhong, director and general manager of the company, on December 31, 2021. Zhou Yunzhong currently holds about 3.865 million shares of the company, accounting for 0.46% of the total share capital of the company, It is planned to reduce the total shares of the company by means of centralized competitive trading on the stock exchange within 15 trading days from the date of disclosure of this announcement to July 25, 2022, accounting for no more than 96.6 shares, accounting for 0.12% of the total share capital of the company. From January 6 to January 7, Jinghua Pharmaceutical Group Co.Ltd(002349) has fallen by the limit for two consecutive trading days.
In addition, Chinese traditional medicine, a Hong Kong listed company whose share price has continued to rise in recent days, also fell due to cash out by shareholders.
innovation transformation into a new focus
The development of the pharmaceutical industry is greatly affected by the policy. If the price rise of traditional Chinese medicine is driven by the market supply side, the change from the policy level will affect the direction of the transformation of the pattern of the traditional Chinese medicine industry.
At present, one of the key words of the traditional Chinese medicine industry is “centralized collection”. On January 6, according to the news released by Shandong Medical Security Bureau, the national inter provincial traditional Chinese medicine (material) Procurement Alliance was launched in Shandong for the first time. The alliance was initiated and established by Shandong Medical Insurance Bureau and 11 provinces (districts and cities) across the country. The first batch of participating areas covered more than 9500 medical institutions in 86 cities. The first batch of joint mining will focus on traditional Chinese medicine decoction pieces (including formula particles), with a cumulative reported amount of more than 10 billion yuan.
Prior to this, the procurement of Chinese patent medicine has been implemented. On December 21, 2021, Hubei pharmaceutical price and bidding procurement management service network released the selection results of centralized volume procurement of inter provincial alliance of Chinese patent medicines. In this centralized procurement of Chinese patent medicines, 193 enterprises passed the audit and participated in the election. 111 products of 97 enterprises were selected, with a winning rate of 62%, an average decrease of 42.27% and a maximum decrease of 82.63%.
“Volume purchase will certainly have an impact on the price of products, but with reference to volume purchase of Chinese patent medicine, the market expectation is more optimistic.” An analyst who asked not to be named told reporters.
With reference to the procurement of chemical drugs, how to inherit, innovate and develop traditional Chinese medicine has become another focus of attention in the current market and industry at the time of reducing unreasonable price water through centralized procurement.
On December 30, 2021, the State Medical Security Bureau and the State Administration of traditional Chinese Medicine issued the guiding opinions on medical insurance supporting the inheritance, innovation and development of traditional Chinese medicine, accelerating the implementation of policies to promote the innovation and development of traditional Chinese medicine.
The opinion points out that qualified traditional Chinese medicine institutions will be included in the designated medical insurance; Strengthen the price management of traditional Chinese medicine services; Bring appropriate traditional Chinese medicine and traditional Chinese medicine medical service items into the scope of medical insurance payment; Improve the payment policy suitable for the characteristics of traditional Chinese medicine and so on; TCM medical service items may not be paid by disease diagnosis related group (DRG) temporarily; In strict accordance with the actual purchase price, plus no more than 25% sales, etc.
Industry insiders believe that, on the whole, the centralized purchase and price reduction of Chinese patent medicine is relatively mild, leaving imagination space for the development of the industry. The continuous implementation of policies supporting the innovative development of traditional Chinese medicine is bound to promote the development of the industry. However, it should be noted that traditional Chinese medicine must innovate and transform, otherwise the living space will be affected.
(source: Securities Daily)
