Policy changes of traditional Chinese medicine: different missions in different times
Traditional Chinese medicine originates from Chinese traditional medicine and traditional culture. In the development process of thousands of years, it is undeniable that traditional Chinese medicine has played an important role in the prosperity and development of the Chinese nation.
Although modern traditional Chinese medicine gradually lost its mainstream position in Chinese medical circles, the protection, inheritance and development of traditional Chinese medicine by the Communist Party of China was sustainable, and traditional Chinese medicine undertook the tasks of medical rescue and control of infectious diseases in the Revolutionary War era when medical resources were scarce.
Since the founding of new China, the development of traditional Chinese medicine has been closely related to policies. In the history of the Republic of China for more than 70 years, the policy of traditional Chinese medicine can be divided into four development stages: scientific exploration stage from 1949 to 1985, institutionalization stage from 1986 to 2002, all-round development stage from 2003 to 2018 and deepening innovation stage from 2019 to now.
1949-2019: Exploration and development in continuous reform
In the 70 years after the founding of the people’s Republic of China, it has experienced the stage of scientific exploration, institutionalization and all-round development. The policy of traditional Chinese medicine has been developing in exploration. During this period, the establishment of the State Administration of traditional Chinese medicine marked that the policy subject was clear; The promulgation of the regulations of the people’s Republic of China on traditional Chinese medicine means the improvement of the legal level. Especially after the 18th CPC National Congress, from February 2016 when the State Council issued the outline of the strategic plan for the development of traditional Chinese medicine (2016-2030), to the end of 2018, there were 11 documents related to the development of traditional Chinese medicine in the national documents within three years, covering development strategies, legal improvement, talent training, classic prescriptions, ethnic medicines and so on.
New era: focus on the inheritance, innovation and development of traditional Chinese Medicine
In October 2019, the State Council issued the opinions on promoting the inheritance, innovation and development of traditional Chinese medicine, which defined the goal, direction and specific measures for the inheritance, innovation and development of traditional Chinese medicine. Subsequently, the local governments of Yunnan, Guangdong, Sichuan and Guangxi Zhuang Autonomous Region also responded positively and introduced corresponding measures to promote the development of local traditional Chinese medicine industry in combination with local characteristics.
In the epidemic situation in 2020, traditional Chinese medicine has become the mainstay of anti epidemic. It is the outstanding contribution of traditional Chinese medicine under the epidemic situation that has accelerated the pace of inheritance, innovation and development. On September 27, 2020, the registration classification and application data requirements of traditional Chinese medicine were significantly updated. After the update, traditional Chinese medicine innovative drugs were listed as the first category, opening the wave of traditional Chinese medicine innovation.
2021 ushered in the outbreak of the implementation of traditional Chinese medicine policies. A series of heavy policies such as the lifting of restrictions on some traditional Chinese medicine in the medical insurance catalogue, the completion of the pilot of traditional Chinese medicine formula granules, the moderate price reduction of centralized purchase of traditional Chinese medicine in Hubei and the guidance on medical insurance supporting the inheritance, innovation and development of traditional Chinese medicine have been implemented one after another. It can be seen that the national support policies for traditional Chinese medicine have gradually transitioned from the top-level design to the implementation stage, It has strong coherence and releases strong positive signals.
Outlook: the new year of policy is open, and more policies are expected to be implemented
At the beginning of 2022, a number of new policies such as “Three Combinations” and “toxicology of new traditional Chinese medicine” have followed, further strengthening the factors of policy change. After combing the policy development process of traditional Chinese medicine, we can first make it clear that the national policy on traditional Chinese medicine is consistent and encourages development as a whole. And the development direction of traditional Chinese medicine policy is gradually clear. Inheriting, innovating and developing traditional Chinese medicine is an important content of the cause of socialism with Chinese characteristics in the new era. Along the two clues of inheritance and innovation, we judge that the current policy drive may only be the first step and is not completely over. We can believe that more specific and substantive policies will be introduced in the future to promote the development of traditional Chinese medicine.
Investment suggestions and related targets: reiterate the “3 + 3” investment clue
Starting from the first in-depth report on traditional Chinese medicine on December 20, 2021, we continue to track the traditional Chinese medicine industry and continue to be optimistic about the changes in the traditional Chinese medicine industry. The five special reports are progressive and link the past and the future. They have history, evolution, logic and investment ideas to prompt the industrial opportunities of traditional Chinese medicine. Focusing on the present, we believe that the current is the initial stage of the development of traditional Chinese medicine industry. Therefore, we re emphasize the “3 + 3” investment clue and pay attention to the three main lines and three themes. Three main lines: Traditional Chinese medicine brands with time-honored brands, characteristic varieties with the ability to raise prices, and undervalued targets with incentives and guarantees.
Time honored brands: Zhangzhou Pientzehuang Pharmaceutical Co.Ltd(600436) , Beijing Tongrentang Co.Ltd(600085) , Yunnan Baiyao Group Co.Ltd(000538) , Guangyuyuan Chinese Herbal Medicine Co.Ltd(600771) etc;
Price increase: Jianmin Pharmaceutical Group Co.Ltd(600976) (covered, buy rating), Dong-E-E-Jiao Co.Ltd(000423) , Chongqing Taiji Industry (Group) Co.Ltd(600129) , Mayinglong Pharmaceutical Group Co.Ltd(600993) , Jiuzhitang Co.Ltd(000989) etc;
There are incentives: China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) (covered, buy rating), Henan Lingrui Pharmaceutical Co.Ltd(600285) , Kpc Pharmaceuticals Inc(600422) , Jiangzhong Pharmaceutical Co.Ltd(600750) , etc.
Three themes: innovation, region and industrial chain.
Innovative traditional Chinese medicine: Guiyang Xintian Pharmaceutical Co.Ltd(002873) , Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Jiangsu Kanion Pharmaceutical Co.Ltd(600557) , Tasly Pharmaceutical Group Co.Ltd(600535) , Hunan Fangsheng Pharmaceutical Co.Ltd(603998) etc.
Regional traditional Chinese medicine brands: Guizhou Sanli Pharmaceutical Co.Ltd(603439) (covered, purchase rating), Guilin Sanjin Pharmaceutical Co.Ltd(002275) , Teyi Pharmaceutical Group Co.Ltd(002728) , Hefei Lifeon Pharmaceutical Co.Ltd(003020) , etc.
Traditional Chinese medicine industry chain: upstream planting and breeding industry chain + traditional Chinese medicine material inspection ( Guizhou Xinbang Pharmaceutical Co.Ltd(002390) , Shanxi Zhendong Pharmaceutical Co.Ltd(300158) , Guizhou Bailing Group Pharmaceutical Co.Ltd(002424) , Focused Photonics (Hangzhou) Inc(300203) , Beijing Labtech Instruments Co.Ltd(688056) , Shanghai Runda Medical Technology Co.Ltd(603108) , Tofflon Science And Technology Group Co.Ltd(300171) , Maider Medical Industry Equipment Co.Ltd(688310) , Truking Technology Limited(300358) ); Midstream dealers (Chinese traditional medicine, Heilongjiang Zbd Pharmaceutical Co.Ltd(603567) ); Downstream pharmacies ( Dashenlin Pharmaceutical Group Co.Ltd(603233) , Yixintang Pharmaceutical Group Co.Ltd(002727) , Yifeng Pharmacy Chain Co.Ltd(603939) , Lbx Pharmacy Chain Joint Stock Company(603883) , Yunnan Jianzhijia Health-Chain Co.Ltd(605266) , Shuyu Civilian Pharmacy Corp.Ltd(301017) ); Layout of the whole industrial chain of traditional Chinese medicine (Chinese traditional medicine, Jointown Pharmaceutical Group Co.Ltd(600998) etc.); Chinese medicine services (gushengtang (covered, buy rating)).
Risk tips
Policy adjustment exceeds expectations; The price increase did not meet expectations; Performance does not meet expectations, etc.
