Food Sterilizer,Food Processing Machinery Parts,Fish Processing Machines

Food Sterilizer,Food Processing Machinery Parts,Fish Processing Machines

The Paper reporter Li Xiaoxiao

On December 31, the last trading day of 2021 for A-shares and Hong Kong stocks, many Chinese medicine stocks rose sharply.

As of the close, in terms of A-shares, industry leaders, Baiyunshan (600332) rose 5.95%, Yunnan Baiyao (000538) rose 7.89%, and Pian Zixi (600436) rose 3.34%. In addition, Zuoli Pharmaceutical (300181), Red Sun Pharmaceutical (300026), Jingjing Pharmaceutical (002349), Xintian Pharmaceutical (002873), Foci Pharmaceutical (002644), Tongrentang (600085), China Resources Sanjiu (000999), Taiji Group (600129) and so on.

In terms of Hong Kong stocks, Tongrentang Technology (01666) rose by more than 17%, Tongrentang Sinopharm (03613) rose by more than 11%, Gusheng Tang (02273) rose by more than 15%, and China Traditional Chinese Medicine rose by more than 12%.

In fact, since December 20, 2021, the Chinese medicine sector as a whole has shown a strengthening trend, hitting the highest point of the year one after another. As of the close on December 31, the traditional Chinese medicine sector closed at 3679.61 points on the same day, an increase of 4.96%, and the highest increase was more than 6.5%. Compared with December 20, the cumulative increase is more than 17%.

Brokerage analysts generally believe that the outbreak of the rise of traditional Chinese medicine stocks is related to national policies and industry characteristics such as little impact by medical insurance policies.

At the end of 2021, Chinese medicine policies were introduced one after another

On December 30, the website of the State Administration of Traditional Chinese Medicine released the “Guiding Opinions of the National Medical Security Administration and the State Administration of Traditional Chinese Medicine on Medical Insurance to Support the Inheritance and Innovation and Development of Traditional Chinese Medicine”, proposing to give full play to the advantages of the medical security system, support the inheritance and innovative development of traditional Chinese medicine, and better meet the people’s demand for traditional Chinese medicine services.

The document mentions that eligible Chinese medicine tablets, proprietary Chinese medicines, and Chinese medicine preparations of medical institutions will be included in the medical insurance drug catalogue according to regulations. The allocation and use of proprietary Chinese medicines that have been negotiated by the state and included in the medical insurance catalogue will be included in the monitoring and evaluation. Make full use of the “dual-channel” drug management mechanism to expand the channels of insured patients’ medication to designated retail pharmacies to better protect the drug needs of the insured people.

Chinese herbal tablets are cleaned, cut and other processed Chinese herbal medicines, which are different from proprietary Chinese medicines taken by patients for daily treatment. The above-mentioned document mentions that public medical institutions purchase Chinese medicine pieces from formal channels and sell them strictly according to the actual purchase price. Non-drinking Chinese medicines are sold in strict accordance with the actual purchase price “zero difference”. The specific scope of Chinese medicine pieces shall be subject to the characterization of the drug regulatory authorities. The Chinese medicine pieces concocted and used by medical institutions and the Chinese medicine preparations prepared shall be priced independently.

This means that Chinese medicine pieces have a larger price space than other Chinese medicines in terms of price.

In addition to the support of medical insurance policies for traditional Chinese medicine, on December 31, 2021, the State Administration of Traditional Chinese Medicine also announced that the first batch of seven national demonstration zones for comprehensive reform of traditional Chinese medicine were approved for construction. The National Demonstration Zone for Comprehensive Reform of Traditional Chinese Medicine takes provinces (autonomous regions and municipalities directly under the Central Government) as the main body of construction, and encourages pilot projects in traditional Chinese medicine service models, industrial development, quality supervision and other aspects. The industry generally believes that this will be conducive to the development of the traditional Chinese medicine industry.

Soochow Securities believes that traditional Chinese medicine has a history of many years in China, is a treasure of the Chinese nation, and is also an important part of the world’s traditional medicine. According to Euromonitor, China’s proprietary Chinese medicine market grew rapidly from 2015 to 2019, with the market size increasing from about RMB625.2 billion in 2015 to about RMB814.9 billion in 2019, with a compound annual growth rate of about 6.8%. In recent years, the state has intensively introduced various policies to support and encourage the inheritance and innovative development of traditional Chinese medicines: the number of over-the-counter drugs in the list of basic drugs accounts for 39.12%, and the continuous promotion of the “986” goal is expected to stimulate the volume of traditional Chinese medicines; Since 2021, the approval of innovative traditional Chinese medicine drugs in China has accelerated, and as of December 24, 2021, 11 innovative proprietary Chinese medicines have been approved. The price of upstream raw materials in the OTC market has increased, and enterprises have the willingness and ability to raise prices, which is expected to usher in a rise in volume and price.

The centralized procurement of proprietary Chinese medicines is on the road, and the impact of medical insurance policies is small

The product is promising

In the past year, payer policies such as centralized procurement and medical insurance negotiation have always affected the development of the pharmaceutical industry. The progress of Hubei’s 19 Province-Region Alliance and Guangdong’s 6 Province-Region Alliance on the policy of centralized procurement of proprietary Chinese medicines has also become important news to stimulate Chinese medicine stocks.

On the evening of December 21, Hubei Provincial Pharmaceutical Price and Bidding Procurement Management Service Network announced the results of the centralized procurement of 19 interprovincial alliances of proprietary Chinese medicines. According to the list of proposed winners announced, a total of 111 proprietary Chinese medicine products were selected this time, involving Sunway Pharmaceutical (02877. HK), KunYao Group (600422. SH), Kangyuan Pharmaceutical (600557. SH), Jumbo Island Pharmaceutical (603567. SH), Sino-American East China Pharmaceutical, Jimin Trust, Tongrentang (600085. SH) and a total of 97 companies. From the perspective of the decline, the average decrease was 42.27%, and the maximum decrease was 82.63%.

From the perspective of the decline, the decline in the centralized procurement of proprietary Chinese medicines is more moderate than that of the past rounds of chemical drugs. Therefore, the industry also generally believes that local alliance centralized procurement is a process of accumulating experience in the centralized procurement of proprietary drugs organized by the state, which is a development opportunity for some enterprises.

On December 24, the Guangdong Drug Exchange Center issued the “Guangdong Alliance Qingkailing and Other Proprietary Chinese Medicines Centralized Procurement Documents”, from the document, the number of centralized procurement products changed from 134 in the previous draft to 132, and the alliance of 7 provinces became 6 provinces. However, the 132 varieties involved in this collection still include large varieties such as Refreshing Brain Calm, Compound Danshen, Blood Saitong, Ginkgo biloba, Lianhua Qingwen, and Antiviral Oral Liquid, so the final result is highly anticipated.

A report released by Essence International on December 28 believes that most of the branded Chinese medicines are sold on the OTC side and are relatively little affected by medical insurance policies. At present, it is recommended to actively deploy high-quality targets in the traditional Chinese medicine sector with low valuation, and you can also pay attention to low-valued varieties that have brand premium ability, are not affected by medical insurance, and are undervalued.

Southwest Securities believes that traditional Chinese medicine consumer goods have consumption attributes, mainly out-of-hospital markets, and relative to “medical insurance immunity”, the future performance of traditional Chinese medicine consumer goods is expected to explode. First of all, upstream Chinese medicinal materials ushered in a price increase, and there is a certain price increase expectation for upstream raw materials + downstream products in the future. Second, the channel inventory clean-up has come to an end, and the superimposed price increase is expected to accelerate the downstream inventory turnover speed of the traditional Chinese medicine sector.

Southwest Securities also mentioned that the mixed reform of state-owned enterprises in the traditional Chinese medicine industry and the changes at the shareholder level have accelerated in the past year, Yunnan Baiyao, Taiji Group, Guangyuyuan, and Zhongxin Pharmaceutical have greatly released the enthusiasm of employees after the mixed reform of state-owned enterprises, and in the first half of 2021, Guangyuyuan, Taiji Group and Zhongxin Pharmaceutical have achieved the change of actual controllers, and the equity incentive target of Yunnan Baiyao’s mixed reform will improve employee enthusiasm. The mixed reform of Tongrentang is also expected to be gradually promoted.

Responsible editor: Wang Jie Photo editor: Jiang Lidong