Recently, the traditional Chinese medicine industry welcomes the favorable policies again. One belt, one road one belt, one road construction project leading group office, issued jointly in January 15th, “promoting the integration of Chinese medicine into the” one belt “development plan (2021 to 2025), and planning, putting forward 50 international cooperation bases for Chinese medicine and a number of export bases for Chinese Medicine services during the” 14th Five-Year “period.
With the continuous support of the policy, the number of new Chinese medicine approved in 2021 reached a new high in recent years. Guosheng Securities pointed out in its research report that in 2021, a total of 12 new varieties of traditional Chinese medicine were approved for listing, which is far higher than the level from 2017 to 2020, and even higher than the sum of the number of new drugs approved in the previous four years. In terms of the number of new drugs declared for listing and clinical traditional Chinese medicine, there were 10 and 48 respectively in 2021, both reaching a new high this year. The agency judged that the acceleration of the approval and listing of new traditional Chinese medicine is, on the one hand, to smooth out the classification, evaluation and approval system of new traditional Chinese medicine, so as to provide favorable conditions for drug research and development and listing; On the other hand, with the strong support of national policies, the review and approval progress of traditional Chinese medicine will be accelerated, and the priority may be increased; Finally, the enterprise seized the favorable opportunity to increase the investment in R & D of new traditional Chinese medicine and the number of application projects, and made a breakthrough after accumulating to a certain extent.
It is worth mentioning that some listed companies of traditional Chinese medicine have also presented good performance expectations. As of the closing on January 17, a total of 8 listed companies in the traditional Chinese medicine sector had issued performance forecasts for 2021 (including those previously predicted in the third quarterly report of 2021), and there were 6 pre hi companies (including pre increase, slight increase, loss reversal and profit continuation). In terms of the upper limit of net profit growth, Zhejiang Conba Pharmaceutical Co.Ltd(600572) (375.00%), Teyi Pharmaceutical Group Co.Ltd(002728) (242.34%), Zhejiang Jolly Pharmaceutical Co.Ltd(300181) (110.58%), Guizhou Sanli Pharmaceutical Co.Ltd(603439) (75.62%) and other four stocks are expected to have a year-on-year increase in net profit of more than 75% in 2021, with outstanding performance.
Stimulated by multiple positive news, since 2022, the traditional Chinese medicine sector as a whole has risen by 3.34%, significantly outperforming the Shanghai stock index over the same period (down 2.70%), and 50 concept stocks in the sector have outperformed the market, accounting for nearly 70%. Among them, the cumulative increase during Jinghua Pharmaceutical Group Co.Ltd(002349) and Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) was the highest, up 42.64% and 40.82% respectively. The cumulative increase during Kunming Longjin Pharmaceutical Co.Ltd(002750) , Hunan Hansen Pharmaceutical Co.Ltd(002412) , Kangyue Technology Co.Ltd(300391) , Guangdong Zhongsheng Pharmaceutical Co.Ltd(002317) , Shandong Buchang Pharmaceuticals Co.Ltd(603858) and other five stocks also exceeded 22%, showing a strong performance.
Traditional Chinese medicine stocks have also been favored by financiers. As of January 14 this year, 24 traditional Chinese medicine stocks have obtained additional positions from financiers during the period, Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Tianjin Chase Sun Pharmaceutical Co.Ltd(300026) , Yunnan Baiyao Group Co.Ltd(000538) and other three stocks have ranked among the top three in terms of net purchases by financiers during the period, respectively 486 million yuan, 340 million yuan, 229 million yuan, Zhejiang Conba Pharmaceutical Co.Ltd(600572) , Yabao Pharmaceutical Group Co.Ltd(600351) , Renhe Pharmacy Co.Ltd(000650) , Dong-E-E-Jiao Co.Ltd(000423) Kpc Pharmaceuticals Inc(600422) and other five stocks received financing during the period, and the net purchase amount of customers also exceeded 100 million yuan.
In this regard, Liu Cunxin, assistant fund manager of private placement paipai.com, interviewed by the reporter of Securities Daily, said that under the resonance of various factors, the traditional Chinese medicine sector has stepped out of a large increase, mainly for the following three reasons: first, the policy support for traditional Chinese medicine is constantly strengthened, and now it is in the stage of population aging, Therefore, the market’s attention to traditional Chinese medicine has been greatly improved. Second, under the influence of the epidemic, the residents’ awareness of healthy consumption has increased, which has driven the continuous growth of the demand for traditional Chinese medicine, resulting in the situation that the supply of traditional Chinese medicine products is in short supply. Superimposed on the factors of the rise of traditional Chinese medicine raw materials, there has been a round of price increase of traditional Chinese medicine products in the near future; Third, after the boom track market ended, the index began to enter the adjustment stage, the market risk aversion gradually rose, and the undervalued value and performance improvement expectation of the traditional Chinese medicine sector just met the current capital demand.
Long Hao, chairman of Jinding assets, said that due to historical reasons and the characteristics of industry development, there are some characteristics in the traditional Chinese medicine industry, such as imperfect standard system, lack of quality evaluation technical standards, insufficient R & D investment, great difficulty in innovation, and the proportion of approved new drugs is declining year by year. The launch of the current plan plays a positive role in the development of the traditional Chinese medicine industry, In particular, at present, relevant policies support the use of traditional Chinese medicine in the field of epidemic prevention, benefiting from the promotion of the epidemic situation on the demand for traditional Chinese medicine treatment, the traditional Chinese medicine industry has received more attention from the capital market.
For the future investment opportunities of the traditional Chinese medicine sector, Long Hao believes that due to the characteristics of the traditional Chinese medicine industry, the differentiation of segments is obvious, and the trend of industry integration and industry concentration is inevitable in the future. The agency is optimistic about the development opportunities of historical brand leading enterprises with upstream raw material M & a capability and product innovation capability, and the medium and long term is worth investing.
Liu Cunxin believes that after a round of rise, the valuation of the traditional Chinese medicine sector has entered a relatively reasonable range. Therefore, it may form a differentiation trend next. He is optimistic about traditional Chinese medicine enterprises with large brand influence, strong innovation ability, high industry barriers and the ability to continuously raise prices.
Zhao Yuanyuan, investment director of Jianhong times, who holds a cautious view, told reporters that the early rise of the traditional Chinese medicine sector is related to the continuous positive policies. These favorable policies have given birth to a wave of traditional Chinese medicine market in the market environment of institutional allocation of low-cost stocks. However, in 2022, after the hedge attraction of low-cost stocks weakens, the short-term sustainable market of traditional Chinese medicine industry will also weaken.
