The output plan of TCM industry will exceed RMB 1 trillion after four years

The Chinese medicine sector recently ushered in good news. The "Twelfth Five Year Plan" of the Chinese medicine industry is expected to be introduced before the end of the year. The innovative Chinese medicine and medicinal material circulation leading listed companies in the Chinese medicine sector will obviously benefit.

The plan will focus on supporting the industrialization of innovative drug varieties for the treatment of common diseases and major diseases, the construction of high-quality raw material and medicine production bases, and the comprehensive demonstration applications of advanced technologies for quality control of traditional Chinese medicine pharmaceutical processes. Fang Shuting, president of the Chinese Medicine Association, predicts that by 2015, the output value of the Chinese medicine industry will exceed one trillion yuan.

The decline in the prices of raw materials for Chinese medicine will also help the cost of Chinese medicine companies decline. From the perspective of beneficiary listed companies, many brokerage analysts believe that Tasly [43.20 1.77% share bar research report], Kangyuan Pharmaceutical [15.63-0.45% share bar research report], Yiling Pharmaceutical [37.10-0.93% share bar research report ] And companies such as Kangmei Pharmaceutical [12.14-2.65% share bar research report] will obviously benefit.

Planning involves three aspects

At present, some support funds for Chinese medicine companies have been allocated and implemented by the Ministry of Industry and Information Technology, which is divided into four major sectors: industrial technology service platform, integrated information service platform, production base construction, and modern warehousing system construction.

The key areas supported by the “Planning” include three major areas: R&D, including the industrialization of innovative drug types for therapeutic common diseases and major diseases; medicinal materials, including the construction of high-quality raw material medicine production bases; and quality control, including Chinese medicines and pharmaceuticals Process quality control advanced technology.

Li Qiushi, an analyst at Shenyin Wanguo [2.07 1.47%], believes that the innovation field of Chinese medicine is concerned with the application of innovative Chinese medicine in cardiovascular, cerebrovascular, tumor, and diabetes. These major diseases provide a good entry point for Chinese medicines with multiple targets due to their complex mechanism, long duration, and lack of chemical specific drugs.

From the perspective of government planning and support, it recommends that investors pay attention to well-developed R&D-type TCM companies in these areas (these companies have completed production management experience and channel accumulation), and are optimistic about those companies with existing innovative species reserves (in accordance with the country Investment in R&D subsidies.

In its opinion, the following three stocks can focus on: Tasly's compound Danshen Dripping Pill is progressing internationally steadily, Yiqi Fumai and Danshen polyphenolic acid injections have started doctor education and promotion; Kang Yuan Pharmaceutical's mind and brain A number of traditional Chinese medicines such as ginkgolides and gambogic acid injections have been completed clinically or are in the later stages of clinical studies; the products of Ginseng Ginseng Yangxin Capsules, Yangzheng Xiaoji Capsules, and Qiangqiangxin Capsules will be gradually launched. Post-research studies to improve the acceptance of mainstream doctors.

Qi Lun Securities analyst Xie Gang is also optimistic about Tasly and Yi Ling Pharmaceutical. He believes that Tasly’s operation of “Compound Danshen Dripping Pill” has been continuously improved from various angles, and around the cardiovascular and cerebrovascular fields, new products have been introduced or acquired. Second-tier products Gradually grow. More importantly, the company has taken the lead in sinking among its peers, covering not only 96% of the nation's tertiary hospitals and more than 4,000 secondary hospitals, but also more than 7,000 first-level hospitals and more than 3,600 community centers. Thousands of pharmacies.

Yi Ling Pharmaceutical has listed nine patented new drugs, and the mother’s patent protection period is after 2021. In terms of sales ability, it has formed a marketing network covering the nation’s pharmaceutical and commercial channels, hospitals and retail terminals.

The plan also emphasizes the scale of raw material medicines. In this “Planning”, 15 million yuan of support funds will be used for the construction of information service platforms, which will be undertaken by the Chinese herbal medicine network. This shows that the centralized trading of herbal medicine trading platforms and price information is Focus on the direction.

Corresponding to the level of listed companies, Li Qiushi said that Kangmei Pharmaceutical will undoubtedly be the most important participant and the biggest beneficiary of this major trend. Similar to the price-distribution platform for Chinese herbal medicines, Tianyiwang.com, the integration of the physical trading platform and the standardization of the price of the decoction pieces should be the focus of the "planning" support and funding. Tasly, Guizhou Braun [13.88 0.43% stock bar research report] and other enterprises involved in the independent planting management of upstream medicinal herbs are also expected to receive certain support.

The continuous decrease in cost

In addition to the above policy support, Chinese medicine companies are also facing the benefits of rising profits brought about by the downside of costs.

GF Securities [22.53-1.62% 股吧研报] found that the prices of Cordyceps sinensis continued to rise from the 13 species of medicinal herbs that were monitored in November. The Taizi ginseng rebounded in the short term, heavy buildings, cassia twigs, trigeminal bitterness, borneol were flat, and other varieties were three. Seventh, honeysuckle, red sage root, Chinese wolfberry, Chinese angelica, Codonopsis, red ginseng, sugar, the latest offer in November all have different degrees of decline.

Galaxy Securities analyst Huang Guozhen recently surveyed the Anguo Chinese herbal medicine market and believes that the overall Chinese herbal medicines will be in a period of falling prices in the coming years, because many varieties of this cycle have already broken through many historical high prices, and the removal of individual species in the future may increase due to accidental factors.

Analyst He Juying predicts that the following prices will rise in the following categories: Heavy Buildings and Cordyceps; varieties expected to fall in the future are: heterophylla, honeysuckle, Chinese wolfberry and Chinese angelica. All other varieties will remain strong or oscillate at high levels.

As a whole, the general price of Chinese herbal medicines in the second half of the year has basically been no suspense, and the cost pressure of pharmaceutical companies has gradually eased. The extent of price cuts of reference herbal medicine varieties and the extent of the influence of drug varieties on the profits of listed companies are favorable to the enterprise Jiangjiang Traditional Chinese Medicine [29.00 -1.29% of the shares in the research report, Kangyuan Pharmaceutical, China Resources Sanjiu [19.40 1.25% shares of bar research report] and Qianjin Pharmaceutical [11.32 1.89% share bar research report]. (Southern reporter Wang Tao)