The pattern of traditional Chinese medicine is regenerated and changed!

China Resources' acquisition of Kunpharm not only changed the current pattern of the Chinese medicine industry, but also made it and Sinopharm two major state-owned enterprises further layout in the Chinese medicine sector, but also let the industry see that in the new cycle and new ecology of the development of the pharmaceutical industry, Certainty and potential in the development of the Chinese medicine indust.
Another A-share listed traditional Chinese medicine group will be transformed into a state-owned holding compa.
On the evening of May 8, Kunpharm Group announced that Huali Pharmaceutical and its concerted actor, Huali Group, had signed a "Share Transfer Agreement" with China Resources Sanj.
According to the agreement, Huali Pharmaceutical and Huali Group will transfer the 212,311,616 shares of Kunming Pharmaceutical Group (accounting for 28% of the total issued shares of Kunming Pharmaceutical Group, hereinafter referred to as "target shares") held by them to China Resources Sanj.
The total price of the underlying shares is 902 billion yuan, corresponding to a transfer price of 167 yuan per sha.
If the share transfer is successfully advanced and completed, the controlling shareholder of Kunpharm Group will be changed from Huali Pharmaceutical to China Resources Sanjiu, and the actual controller will be changed from Wang Licheng to China Resources .
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China Resources Sanjiu announced that the reorganization is in line with the company's strate.
On the basis of the good brand operation ability of China Resources Sanjiu, it can explore to build "Kun Chinese Medicine 1381" and "Kun Chinese Medicine" into high-quality Chinese medicine brands, which is conducive to promoting the use of San.
As the representative of the high-quality development of the traditional Chinese medicine industry chain, we will build a leading enterprise in the Panax notoginseng industry cha.
01 After the completion of the merger and acquisition, the pattern of Xuesaitong was reshap.
On May 5, after the Kunpharm Group issued an announcement and suspended trading, the industry predicted that the change in the actual controller of Kunpharm could take three possible directio.
The second largest shareholder of Yunnan Hehe (Group) .
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won the actual control, as it was before Guangyuyuan; secondly, like Dianhong Pharmaceutical, it was acquired by multinational pharmaceutical companies; thirdly, it reached an equity transfer agreement with a central enterprise , such as the former Tai Chi Gro.
He also believes that the third type of cooperation is the best choice, and can take advantage of the resource advantages of central enterprises to obtain a broader development spa.
Sure enough, on May 8, China Resources Sanjiu, a listed company under China Resources, issued an announcement that it planned to acquire Kunpharm Gro.

At present, this equity transfer is a "win-win" choice, with product line synergy as the biggest highlig.
Kunpharm Group and China Resources Sanjiu are the main suppliers of Xuesaitong, a large variety of traditional Chinese medici.
The market also reacted quick.
As of press time, Kunyao has risen by more than 10%, and the daily limit is at the openi.
Kunyao Group is an old-fashioned traditional Chinese medicine company that has been listed for more than 20 yea.
Its main business segments include botanical medicine series mainly including Panax notoginseng saponins (the main component of Xuesaitong) series, Tian/ma/su series, and Artemisia annua seri.
Product segment; high-quality Chinese medicine segment based on Chinese patent medicines such as Shugan Granules, Banlan Qingre Granules, Shenling Jianpiwei Granules, e.
; chemical drug segment based on bone and joint health, immunosuppression, antibiotics and other fields; Pharmaceutical distribution Business-based pharmaceutical distribution sect.
From the perspective of revenue and net profit attributable to the parent in 2021, Kunming Pharmaceutical Group has reached a record hi.
In 2021, the revenue of Kunpharm Group will be 254 billion yuan, a year-on-year increase of 95%; the net profit attributable to shareholders of listed companies is 508 million yuan, a year-on-year increase of 11
Among them, the "Kunyao Xuesaitong" and "Kunyao 1381" series of oral products are the "two sharp weapons" for its breakthrough in the mark.
In 2021, Kunyao Xuesaitong series of oral products achieved sales of 940 million yuan, an increase of 18% year-on-ye.
However, the emergence of centralized procurement of traditional Chinese medicine has become the most important uncertainty that Kunyao Group's Xuesaitong series products need to face in the futu.
In 2021, Kunyao Xuesaitong will be included in the Centralized Procurement Alliance of Chinese Patent Medicines in 19 provinces including Hubei and the Centralized Procurement Alliance of Chinese Patent Medicines in 6 provinces including Guangdong, and both won the b.
In terms of China Resources, its listed company, which is the main body of the merger, China Resources Sanjiu is also a heavy player in Xuesaitong products, and participated in the 2021 Hubei-led organization to carry out the procurement of proprietary Chinese medicines by the provincial alliance, but failed to win the b.

China Resources Sanjiu mainly relies on Kunming China Resources Shenghuo to operate Xuesaitong soft capsules, mainly through retail channe.

In 2021, the retail end will achieve sales of 414 million yuan and a growth rate of 27
According to a recent investment survey by China Resources Sanjiu, its Xuesaitong soft capsules account for more than 50% of the retail mark.

Wanlian Securities analysis believes that Xuesaitong centralized procurement has limited impact on product sal.

On the one hand, it is because China Resources Sanjiu Xuesaitong Soft Capsules are mainly sold in retail channels and have a certain immunity to centralized procureme.

Secondly, Xuesaitong Soft Capsules The competitive landscape is good, with only two manufacturers, China Resources Shenghuo and Kunyao Gro.

This also means that, if the transaction is completed, CR Sanjiu's Xuesaitong capsules will fully cover the in-hospital and out-of-hospital marke.

Huali Group previously had two listed Chinese medicine companies: Kunyao Group and Wuhan Jianm.

According to relevant sources, next, Holley Group will further consolidate the industrial competitiveness of Wuhan Jianm.

In 2005, Huali Group joined Jianmin Gro.

Compared with Kunming Pharmaceutical Group, Jianmin Group, as a national key traditional Chinese medicine enterprise, has obvious characteristics of pediatric medici.

In addition, Jianmin Group is a time-honored enterprise in China, with "Jianmin" and "Longm.

"Two modern brands and "Yekaitai" time-honored bra.

In terms of performance, Jianmin Group's revenue in 2021 will be 278 billion yuan, a year-on-year increase of 348%, and the net profit attributable to shareholders of listed companies will be 325 million yuan, a year-on-year increase of 117
Pediatrics business is its main source of reven.

In 2021, the revenue in this field will be 890 million yuan, a year-on-year increase of 48%, while the single product sales of Longmu will increase by 475% year-on-ye.

Jianmin Dapeng also has an exclusive variety of in vitro cultivated bezoar raw materials, and its application for the protection of Chinese medicine varieties of in vitro cultivated bezoar is already in the state of applicati.

The 2021 annual report shows that Jianmin Dapeng's net profit in 2021 will be 42826 million yu.

In addition, on the traditional Chinese medicine prescription line, Jianmin Group has successively launched Xiaoer Xuanfei Zhike Granules, Estradiol Gel, Pudushengji Powder, Levetiracetam Oral Solution, Qirui Weishu Capsules, e.

These new prescription drugs The listing of varieties may bring better development for Jianm.

02 China Resources PK Sinopharm, who is stronger in the traditional Chinese medicine sector? In recent years, China Resources Pharmaceutical Group and Sinopharm Group have shown obvious signs of making efforts in the traditional Chinese medicine sect.

With the completion of China Resources Sanjiu's acquisition of Kunyao, their respective territories have undergone subtle chang.

Sinopharm Group started earlier in the layout of the Chinese medicine sector in this rou.

At present, the total annual revenue of Sinopharm Group exceeds 700 billion yuan, and it owns seven listed companies: Sinopharm Holding, Sinopharm .

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, Sinopharm Accord, Tiantan Bio, Modern Pharmaceutical, China Traditional Chinese Medicine, and Taiji Gro.

As early as 2013, Sinopharm Group acquired Yingtian Pharmaceutical through Sinopharm Traditional Chinese Medicine, acquired Guizhou Tongjitang Pharmaceutical in the same year, and then changed its name to China Traditional Chinese Medicine Holding .

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Since then, in 2015, it acquired 83% equity of Jiangyin Tianjiang Pharmaceutic.

Since 2016, it has successively acquired Huayi Pharmaceutical, Guizhou Tongjitang Pharmacy Chain, Guizhou Tongjitang Decoction Pieces, Shanghai Tongjitang and Beijing Huamiao Pharmaceutic.

The leading position of traditional Chinese medicine in the field of traditional Chinese medicine, especially the industry of traditional Chinese medicine formula granules, is constantly highlight.

At present, China Traditional Chinese Medicine is the core platform of Sinopharm Group's traditional Chinese medicine industry sector, helping Sinopharm Group focus on six major sectors including traditional Chinese medicine formula granules, traditional Chinese medicine, traditional Chinese medicine decoction pieces, traditional Chinese medicine planting and management, traditional Chinese medicine health, and traditional Chinese medicine muse.

The data shows that from 2012 to 2021, the compound growth rate of China's traditional Chinese medicine revenue and net profit attributable to the parent company was 332% and 321% respectively, with strong growth momentum and gradually improving profitabili.

With the holding of Taiji Group in 2021, Sinopharm Group's integrated layout in the traditional Chinese medicine sector has become clear.

In 2021, Taiji Group officially entered Sinopharm Gro.

Judging from the "14th Five-Year" strategic plan released by Taiji Group in January this year, Taiji Group will become a new strategic location for Sinopharm Gro.

To put it simply, Taiji Group will build a “Sinopharm Department” with a large health industry platform based on traditional Chinese medicine, lay out the whole industry chain of traditional Chinese medicine, fully connect with the national strategy of the Chengdu-Chongqing economic circle, and eventually become the strategic growth pole of Sinopharm Group in the western regi.

In the future, China Traditional Chinese Medicine is also expected to cooperate with Taiji Group in terms of products, channels, and upstream Chinese herbal medicine resources to achieve complementary advantages in the traditional Chinese medicine indust.

At present, the two listed Chinese medicine companies under Sinopharm Group, the H-share China Traditional Chinese Medicine's revenue in 2021 is 1053 billion yuan, and the current market value is 16 billion yuan; the A-share listed company Taiji Group's revenue in 2021 is 11 billion yuan, and the current market value is 8 billion yu.

With China Resources Sanjiu becoming the new owner of Kunpharm Group, the number of Chinese medicine listing platforms under China Resources Pharma has increased to 4 - China Resources Sanjiu, Dong-E-Ejiao, Jiangzhong Pharmaceutical and Kunpharm Gro.

Mergers and acquisitions play an important role in the continuous development and growth of China Resources Phar.

From 2008 to 2021, it has successively acquired listed platforms such as China Resources Sanjiu, China Resources Shuanghe, Dong'e Ejiao, Boya Bio and other subsidiaries of China Resources Jiangzhong, China Resources Zizhu, China Resources Biomedicine, China Pharmaceutical Research and Development Center, China Resources Tang and other subsidiari.

As a "Big Mac" in the pharmaceutical industry, China Resources Pharma's layout in the A-share pharmaceutical market has now built an ecosystem: from chemical drugs to branded traditional Chinese medicines, from traditional Chinese medicine cultivation to drug distribution, mergers and acquisitions have allowed China Resources to form a A full range of pharmaceutical ecology spanning Chinese and Western medicine, from manufacturing to distribution, from prescription drugs to OTC and health care produc.

Tianfeng Securities believes that China Resources continues to acquire high-quality targets, and through integrated business layout, it can give full play to its industrial synergy advantages and achieve a high degree of resource integrati.

The logic of such mergers and acquisitions is also traceable in the field of traditional Chinese medici.

This time, China Resources Sanjiu has become the owner of Kunpha.

The two parties can fully cooperate in Sanqi industry chain, brand building and other aspects to enhance the comprehensive competitiveness of the enterpri.

China Resources Sanjiu will be committed to building Kunpharm Group into a leading enterprise in the Sanqi industry cha.

And around its core plant resources such as Panax notoginseng and Artemisia annua, it will develop in depth to promote the modernization and industrialization of traditional Chinese medici.

At present, the total market value of China Resources Sanjiu, Dong’e Ejiao, Jiangzhong Pharmaceutical, and Kunyao Group is 74 billion yuan, accounting for 9% of the market value of all A-share listed traditional Chinese medicine companies; The main revenue is 31 billion yuan, accounting for 1% of the total revenue of all A-share listed Chinese medicine compani.

03 The certainty of the traditional Chinese medicine industry under the new pattern The Chinese pharmaceutical industry can be divided into generic drugs, innovative drugs and traditional Chinese medicines in terms of business segmen.

However, in recent years, among generic drugs and innovative drugs, with the normalization of centralized procurement The promotion of innovation and the implementation of innovative drug and medical insurance negotiations has made the future of related companies full of uncertain.

In contrast, with the favorable policies of traditional Chinese medicine, the certainty of future development has increas.

In the field of generic drugs, the normalization of bulk procurement of chemical generic drugs is unstoppab.

The fourth, fifth and sixth batches of national centralized procurement in 2021 will save 12 billion yuan/year, 25 billion yuan/year and 9 billion yuan/year respective.

The first six batches of national centralized procurement will save a total of 106 billion yuan in drug costs /ye.

Even Hengrui, the industry leader in transformation and innovation 20 years ahead of schedule, is still digesting the impact of centralized procureme.

The collection of biosimilar medicines also seems to be "on the lin.

Although many companies have previously called for the postponement of the centralized procurement of biosimilars, the Medical Insurance Bureau has made it clear that the centralized procurement of biosimilars will be do.

The sixth batch of special national procurement of insulin has also accumulated experience for the centralized procurement of biosimila.

In addition, the 11-province alliance led by Guangdong has launched the "first shot" of the centralized procurement of biosimila.

Rituximab has been included in the centralized procurement list, and the full inclusion of biosimilars in the centralized procurement may speed .

Companies that once deployed biosimilars have transformed one after anoth.

Henlius, which has 4 biosimilars in China, has begun a comprehensive transformation to innovati.

Internationally, giants have also begun to withdraw from the field of biosimila.

For example, Biogen sold a joint venture share of Samsung Bio, whose main business is biosimilars, to Samsung; global generic drug giant Huizhi sold its biosimilar business to an Indian compa.

Innovative drugs are the future and must be do.

This general direction has always been fi.

However, under the anxiety of various unfavorable factors such as the lack of volume after the national talks, the frustration of internationalization, e.

, innovative drugs seem to have reached a node that requires a breakthrough from quantitative change to qualitative change: when will innovative drugs really benefit the company's front-end research and development after commercialization? Instead of "burning money" to buy the future, the industry and investors seem to have been waiting for this signal, and use this signal to weigh the certainty of the future development of innovative drugs in Chi.

In contrast, the traditional Chinese medicine industry is another sce.

In 2021, the boots of the centralized procurement of Chinese patent medicines will be launched, and the centralized procurement of Chinese patent medicines by the 19-province alliance led by Hubei will drop by an average of 427%, which will be an exploration and attempt for the centralized procurement of all categories in the futu.

This drop, compared with the drop of more than 50% for chemical and biological drugs, appears more modera.

After encountering centralized procurement, at the end of 2021 and early 2022, the stock market of the traditional Chinese medicine industry has changed from the sluggish trend of the past five years, and many companies' stock prices have rebounded against the trend, which is completely different from the market performance of chemical and biological drug companies after centralized procureme.

In addition, in the negotiation of medical insurance renewal, the decline of traditional Chinese medicine has also been relatively modera.

For example, in the negotiation of medical insurance renewal in 2021, the prices of most products are basically the sa.

Only Shenwei Pharmaceutical's Qihuangtongmi Soft Capsules have dropped by more than 10% to 18
The prices of Shanghai Kaibao's Tanreqing Capsules have dropp.

up 8
From the perspective of national policy, relevant policies continue to increa.

For example, in 2021, the state issued the "Notice on Several Policies and Measures to Accelerate the Development of Traditional Chinese Medicine Characteristics", proposing to implement major projects for the development of traditional Chinese medicine, improve the development efficiency of traditional Chinese medicine, and create a good environment for the development of traditional Chinese medicine; The Notice on Several Measures for the High-Quality Development of Chinese Medicine Service Export Bases" pointed out that it is necessary to vigorously promote the trade in Chinese medicine services and help the internationalization of Chinese medicine services; Internet + "Traditional Chinese medicine services are included in medical insurance, and the coverage of medical insurance for traditional Chinese medicine and traditional Chinese medicine special medical services can be increas.

TCM medical institutions may not implement DRG payment for the time bei.

The performance of the secondary mark.

On the first trading day of 2022, 20% of A-share Chinese medicine stocks will hit the daily lim.

In addition, the policy lifted the ban on traditional Chinese medicine formula granul.

The State Food and Drug Administration issued the "Announcement on Ending the Pilot Work of Traditional Chinese Medicine Formula Granule.

From the previous 2461 traditional Chinese medicine hospitals to all medical institutions, drugs are allowed to have a bonus of no more than 2
With the support of a series of policies and the promotion of review and approval in line with the characteristics of traditional Chinese medicine, the "new" forces of traditional Chinese medicine are on the ri.

In 2021, 12 new traditional Chinese medicines will be approved, a record high in the past five yea.

If chemical drugs and biological drugs allow investors to see the "elasticity" of the future full of great uncertainty, the traditional Chinese medicine industry gives the industry a future that is full of certainty and can be m.

In this regard, it is obvious that local state-owned assets and state-owned enterprises with resource advantages are ahe.

Whether Zhejiang State-owned Assets Supervision and Administration Commission (SASAC) becomes the owner of Kangenbei, or Shanxi State-owned Assets becomes the controlling shareholder of Guangyuyuan, it is one of the important measures taken by the local government to achieve a strong province of traditional Chinese medicine or to create the characteristics of the traditional Chinese medicine indust.

In August last year, the State-owned Assets Supervision and Administration Commission announced a set of data at the media briefing on the structural adjustment and restructuring of central enterprises: In 2020, the amount of mergers and acquisitions by central enterprises in the medical and pharmaceutical industry will reach 129 billion yuan, a year-on-year increase of 4 tim.

This figure is even more obvious in today's traditional Chinese medicine sect.

According to Choice data, as of May 7, among the 71 listed traditional Chinese medicine companies in the A-share Shenwan industry classification (pharmaceutical biology - traditional Chinese medicine II - traditional Chinese medicine III), the actual controller of the company or the top three shareholders with the background of central enterprises and state-owned assets There are as many as 25 companies, accounting for 3
In the past year, these 25 companies have generated a total revenue of 212 billion yuan from their main business, accounting for 65% of the total revenue of pharmaceutical companies in the Shenwan industry classification (pharmaceutical biology - traditional Chinese medicine II - traditional Chinese medicine II.

Table 1: In the A-share traditional Chinese medicine sector, the actual controller of the company or the top three shareholders have the background of central enterprises and state-owned assets (Data source: Choice data, as of May 7, 2022) If you look at the company's market value, it is more intuiti.

According to Choice data, as of the close on April 29, the total market value of these 25 companies was 599 billion yu.

Specifically, among the top ten pharmaceutical companies by market value in the current Chinese medicine sector, as many as 7 companies have the background of central enterprises or state-owned asse.

Table 2: Top 10 Chinese medicine companies by market capitalization in the A-share Chinese medicine sector (marked in green as having a central SOE or state-owned background) (Data source: Choice data, as of April 29, 2022)