On January 11, the Chinese medicine sector continued to maintain a strong trend. As of the closing, the traditional Chinese medicine sector of Shenwan’s secondary industry rose 1.96%, of which, Ji Yao Holding Group Co.Ltd(300108) “20cm” limit, Chongqing Pharscin Pharmaceutical Co.Ltd(002907) , Guangdong Zhongsheng Pharmaceutical Co.Ltd(002317) , Kpc Pharmaceuticals Inc(600422) , Kunming Longjin Pharmaceutical Co.Ltd(002750) , Dali Pharmaceutical Co.Ltd(603963) , Dong-E-E-Jiao Co.Ltd(000423) limit, Guiyang Xintian Pharmaceutical Co.Ltd(002873) , Guizhou Yibai Pharmaceutical Co.Ltd(600594) and so on increased by more than 6%.
Pan Helin, executive director of Digital Economy Research Institute of Central South University of economics and law, told Securities Daily: “Recently, the market performance of traditional Chinese medicine industry is strong. Firstly, driven by favorable policies, promote the development of traditional Chinese medicine through policy support, especially integrate traditional Chinese medicine into medical insurance and support the traditional Chinese medicine industry through medical insurance payment; secondly, the valuation is low and traditional Chinese medicine rebounds; thirdly, the pricing of volume procurement is better than expected and the price decline is lower than other categories Type I drugs; Fourth, the state has accelerated the examination and approval of traditional Chinese medicine; Fifth, there is a rising price trend for some non Medicare traditional Chinese medicine. “
Recently, the Chinese medicine industry has witnessed frequent positive events, and policy support has been given in many dimensions such as platform construction, quality system, price and payment. On December 30, 2021, the State Medical Insurance 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. The opinions put forward that qualified traditional Chinese medicine institutions should 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; Strengthen the supervision of medical insurance funds.
Zhang Xiaorong, President of Shenzhen Institute of science and technology, said in an interview with Securities Daily: “The integration of traditional Chinese medicine into the national development plan has ushered in a major opportunity for the traditional Chinese medicine industry. The guiding opinions have widened the large-scale channels of the traditional Chinese medicine market, which has greatly benefited the traditional Chinese medicine industry from the inclusion of fixed-point medical insurance to the scope of medical insurance payment, medical insurance payment policies and service prices, and laid a foundation for the development of the traditional Chinese medicine market.”
The administration of traditional Chinese medicine also pointed out that there were some opinions on the development of traditional Chinese medicine, but there was no clear support from the administration of traditional Chinese medicine. This opinion can be summarized into two points: first, medical insurance supports the development of traditional Chinese medicine with clear curative effect, which is beneficial to the exclusive varieties of traditional Chinese medicine, including innovative traditional Chinese medicine; Second, improve the accessibility of TCM reimbursement, expand the scope of TCM institutions into medical insurance, and provide support for TCM diagnosis and TCM rehabilitation industry. This policy is beneficial to the industrial chain of traditional Chinese medicine.
In addition to policy support, the rise in this round of traditional Chinese medicine has something to do with the higher than expected results of centralized procurement. On December 21, the centralized procurement of Chinese patent medicines of 19 provincial alliance was opened. Hubei led the inter provincial centralized procurement alliance of Chinese patent medicines established by 19 provinces and cities such as Hebei and Shanxi, and jointly carried out the centralized procurement of Chinese patent medicines in Wuhan. A total of 97 enterprises and 111 products were selected in this round of centralized purchase of traditional Chinese medicine, with a selection rate of 62%. The average price of the selected products decreased by 42.27% and the maximum decreased by 82.63%. Overall, the price reduction of this Chinese patent medicine is relatively mild.
After the announcement of the results of centralized purchase of Chinese patent medicine, Chinese medicine stocks immediately showed a general rise on December 22. Open source Securities pointed out that from the perspective of the volume procurement of Chinese patent medicine that has been implemented, the centralized purchase price is not expected to decline like a cliff, but to ensure that traditional Chinese medicine enterprises have a certain profit space based on its cost.
Stimulated by the policy overweight industry development, the moderate price reduction of centralized procurement and other factors, the share prices of relevant traditional Chinese medicine enterprises ushered in a round of accelerated rise. According to the statistics of China stock market news choice, from December 22, 2021 to January 11, 2022, Shenwan traditional Chinese medicine sector increased by 12.03%, of which, Kunming Longjin Pharmaceutical Co.Ltd(002750) increased by 164.41%; The Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) range increased by 43.09%, outperforming the whole traditional Chinese medicine sector.
Galaxy Securities said that the traditional Chinese medicine industry is one of the key industries protected by the state. The relevant national policies actively encourage the development of the traditional Chinese medicine industry and the traditional Chinese medicine decoction piece industry. The relevant regulatory authorities of various provinces have also formulated relevant policy provisions to increase their support for the traditional Chinese medicine industry and related enterprises. The continuous improvement of the industry supervision system and the support of industry regulations and policies are conducive to the sustainable and healthy development of the traditional Chinese medicine industry.
Northeast Securities Co.Ltd(000686) analyst Deng Lijun pointed out that “under the background of the continuous introduction of favorable policies, the prosperity expectation of the traditional Chinese medicine sector has improved. At the same time, superimposed with the intensive price increase of the traditional Chinese medicine industry, the valuation of the sector is expected to be repaired”.
(source: Voice of Securities Daily)
