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Original title: Industry trends | Chinese medicine stocks collectively rose, policy escort superimposed the price increase of Chinese herbal medicines, which is good for the industry trend
Financial Associated Press (Chengdu, reporter Zhang Haixia) news，Behind the collective surge of traditional Chinese medicine stocks, reporters from the Financial Associated Press learned from various interviews that the price of Chinese medicinal materials has shown a general upward trend in recent days, which has now been transmitted to the downstream, pushing up the price trend of finished traditional Chinese medicine; in addition, policies to support the traditional Chinese medicine industry are frequently introduced. Valuation rotation, new crown special medicines, and strong consumption attributes of traditional Chinese medicines are all good for the industry trend.
The price of medicinal materials pushes up the price of finished Chinese medicine
On March 2, Chinese medicine stocks rose collectively.Longjin Pharmaceutical（002650.SZ）、Zixin Pharmaceutical(002118.SZ) andWatson Pharmaceuticals(002907.SZ) and many other stocks rose by more than 5%. Financial Associated Press reporters learned from various interviews that the logic behind the surge in Chinese medicine stocks is not unrelated to the rise in prices of Chinese herbal medicines.
“Recently, the prices of many varieties of Chinese medicinal materials have risen, including Dianhuangjing, safflower, honeysuckle and other Chinese medicinal materials. The price of Chinese medicinal materials has risen the most, mainly due to the large demand for downstream Chinese medicine processing varieties, which has pushed up the prices of upstream Chinese medicinal materials.” A Yunnan Chinese herbal medicine manufacturers said in an interview with a reporter from the Financial Associated Press.
At present, the price increase of upstream Chinese medicinal materials has been transmitted to the downstream.Yunnan Baiyao(000538.SZ) on March 1, stated clearly on Interactive Easy: “The price of Chinese medicinal materials is generally rising. In addition, in view of the increasing costs of various energy consumption and packaging materials, the company has carefully studied various factors. The ex-factory price of Yunnan Baiyao (powder) products has been raised.” The reporter from Cailian Press contacted Yunnan Baiyao many times about the increase of related products, but as of press time, the other party has not responded.
“Traditional Chinese medicine pays attention to the same origin of medicine and food. The upstream Chinese medicinal materials belong to agriculture, agriculture is more sensitive to inflation, and the price of Chinese medicinal materials fluctuates greatly.” A relevant person from a listed Chinese medicine company analyzed the price fluctuations of Chinese medicinal materials. It is worth mentioning that the State Forestry and Grassland Administration recently issued the “Guidelines for the Development of Forestry and Grassland Chinese Medicinal Materials Industry”, indicating that the country will be divided into 9 production areas to build a forestry, grass and Chinese medicinal material industry system.
From the market point of view, a market analyst said: “The traditional Chinese medicine sector started to move again today after a period of adjustment. In fact, the previous wave of gains has fallen back to the range where the previous rise started, which is basically a pattern of inhalation on dips. A reporter from the Financial Associated Press noticed that compared with the biomedical sector, the overall valuation of the traditional Chinese medicine sector is relatively low.
A medical analyst told the Financial Associated Press that in the long run, the logic behind the traditional Chinese medicine market may not be medicine, and the consumption attribute is its logic. The reporter noticed that the market also believes that high repurchase rate and consumption stickiness are one of the logics for the rise of the traditional Chinese medicine sector.
(Note: The trend of the market size of traditional Chinese medicine in recent years, from the Everbright Securities Research Institute)“The strength of consumption attributes should also be viewed by sector. For example, oral traditional Chinese medicines cover common and frequently-occurring diseases, and their repurchase rate is high and their consumption attributes are strong; but traditional Chinese medicine injections need to be developed under professional guidance. The consumption attribute is relatively weak.” The above-mentioned Chinese medicine company said.
It is worth mentioning that the market has also paid attention to the special efficacy of Chinese patent medicines on new coronary pneumonia.Yiling Pharmaceutical(002603.SZ) recently stated that relevant research results have confirmed that the company’s proprietary Chinese medicine Lianhua Qingwen can significantly improve the improvement rate of clinical symptoms such as fever, fatigue, and cough of new coronary pneumonia, and significantly improve lung imaging lesions. As of today’s close, Yiling Pharmaceutical closed at 25.02 yuan, an increase of 5.35%.
Favorable policies for traditional Chinese medicine are frequently introduced to enable the development of the industry
In terms of policies, favorable policies for the traditional Chinese medicine industry have been issued frequently recently. The above-mentioned person from the Chinese medicine company told the Financial Associated Press: “In recent years, a series of supporting policies to support the development of the Chinese medicine industry have been introduced from the research and development side to the market side, including the hospital side. “Implementation Opinions of the National Medical Products Administration on Promoting the Inheritance, Innovation and Development of Traditional Chinese Medicine”.
In addition, the continuous expansion of Chinese patent medicines in the medical insurance list, the free clinical use of classic prescriptions, and the development of Chinese medicine formula granules have all formed positive support for the Chinese medicine industry. A reporter from the Financial Associated Press learned that 6 of the 33 Class I innovative drugs approved in 2021 are proprietary Chinese medicines, which is the peak of the approval of Class I innovative traditional Chinese medicines since 2016.
(Note: In recent years, some Chinese medicine policies have been sorted out, from the Everbright Securities Research Institute)Soochow SecuritiesAnalyst Zhu Guoguang pointed out in the research report that the state has given greater support to the traditional Chinese medicine industry. In 2021, the number of CDE traditional Chinese medicine acceptance numbers will increase from more than 400 in 2020 to more than 1,200 in 2021; the varieties of traditional Chinese medicines that enter the base medicine will ensure high volume; in addition, traditional Chinese medicine treatment The disease has a congenital advantage, and the treatment of the disease has risen to the national strategy.
In terms of volume procurement, the discount rate of proprietary Chinese medicines, especially exclusive Chinese medicines, is relatively low compared to chemical medicines and generic drugs, which to some extent exceeds market expectations. According to a reporter from the Financial Associated Press, at the end of last year when the Hubei Inter-Provincial Alliance launched the centralized procurement of Chinese patent medicines, the average price drop of the products to be selected was only 42.27%, which was far lower than the average drop of recent batches of nationally-purchased medicines. A person from a traditional Chinese medicine company told the Financial Associated Press that the decline in exclusive Chinese patent medicine was even smaller, between 30% and 40%.
In terms of the future market space of Chinese patent medicines, the above-mentioned industry analysts believe that Chinese patent medicines currently only account for about 20% of the market. Due to the influence of favorable policies and other factors, the market development space is relatively broad.
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