Zhou’s view: Fourth, how about the sustainability of the recent market of traditional Chinese medicine
Recently, the market performance of the traditional Chinese medicine industry is strong. We believe that there is a strong foundation for the sustainability of the traditional Chinese medicine market in the aspects of traditional Chinese Medicine Inheritance and innovation, payment, price increase and centralized collection with volume.
First, the reform of the evaluation system of traditional Chinese medicine and the optimization of registration classification laid the first year for the great development of classic famous prescriptions, tested prescriptions and national drugs of traditional Chinese medicine. In 2021, the State Food and Drug Administration urgently approved three new traditional Chinese medicine drugs against covid-19 virus, and approved the market application of eight new traditional Chinese medicine drugs such as Yishen Yangxin Anshen tablets, with the largest number of new traditional Chinese medicine drugs approved in the past five years. Second, the payment policy is conducive to the great development of traditional Chinese medicine. Recently, the State Administration of traditional Chinese medicine and the State Medical Insurance Bureau jointly issued the guiding opinions on medical insurance supporting the inheritance, innovation and development of traditional Chinese medicine, adding medical insurance at the payment end to support the inheritance and development of traditional Chinese medicine; Third, due to the price increase of upstream traditional Chinese medicine, traditional Chinese medicine (decoction pieces and Chinese patent medicine) is one of the few pharmaceutical products with the basis of price increase. Due to the rise of raw material prices, many traditional Chinese medicine enterprises have successively announced the price increase of some products; Fourth, the purchase of traditional Chinese medicine with quantity, the centralized collection and landing of traditional Chinese medicine are relatively mild, the number of exclusive varieties of traditional Chinese medicine is large, and the competition is relatively mild.
We are optimistic about the following categories of traditional Chinese medicine: decoction pieces and formula particles of traditional Chinese medicine: Chinese traditional Chinese medicine (0570. HK) and Tianjin Chase Sun Pharmaceutical Co.Ltd(300026) (300026. SZ). Brand Chinese patent medicine: Yunnan Baiyao Group Co.Ltd(000538) (000538), Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) (600436), Tianjin Zhongxin Pharmaceutical Group Corporation Limited(600329) (600329), Guangyuyuan Chinese Herbal Medicine Co.Ltd(600771) (600771), etc. OTC Chinese patent medicine varieties: optimistic about Hubei Jumpcan Pharmaceutical Co.Ltd(600566) , China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) , Jiuzhitang Co.Ltd(000989) , etc.
Market review: the biomedical sector made a lot of adjustments this week, down 3.94%, ranking 23rd in all SW primary industries. Since the beginning of this year, pharmaceutical biology has fallen by 3.94%, 1.55 percentage points lower than Shanghai and Shenzhen 300 index, ranking 23rd in all SW primary industries.
In terms of subdivided industries, this week, the pharmaceutical and biological subdivided sector fell in addition to the pharmaceutical business, with the pharmaceutical business up 1.29%, and the medical service falling the most, down 10.34%. Since the beginning of this year, the performance of pharmaceutical business has been the best, up 1.29% year to date; Medical services was the weakest performing sub sector, down 10.34%. Medical services (- 10.34%), medical devices (- 4.60%), chemical raw materials (- 4.40%) underperformed the pharmaceutical and biological (SW) industry index.
In terms of individual stock performance, the top five stocks that rose last week were: Shanghai Kaikai Industry Company Limited(600272) (46.29%), * ST jiaoang (35.37%), Beijing Hotgen Biotech Co.Ltd(688068) (34.79%), Zhejiang Yatai Pharmaceutical Co.Ltd(002370) (29.02%) and Huasu Holdings Co.Ltd(000509) (21.31%). The top five stocks with declines are: Pharmablock Sciences (Nanjing) Inc(300725) (- 20.55%), Porton Pharma Solutions Ltd(300363) (- 19.33%), Fujian Cosunter Pharmaceutical Co.Ltd(300436) (- 18.76%), Asymchem Laboratories (Tianjin) Co.Ltd(002821) (- 18.67%) and Guangzhou Kingmed Diagnostics Group Co.Ltd(603882) (- 17.77%).
Valuation: the valuation showed an upward trend this week. As of Friday (January 7), PE (TTM) and Pb (LF) in the pharmaceutical and biological (SW) industry were 33.7 times and 4.12 times respectively.
Risk warning: medical policy risk; Lower prices than expected; Systemic risk.
