The traditional Chinese medicine sector is differentiated, can the rising market continue?

Since the end of 2021, due to favorable policies, product price increases and other factors, the traditional Chinese medicine sector has continued to be hot and has attracted much attention from the capital market
.
On the opening day of the market on January 4, 2022, the Wind Chinese Medicine Index rose by more than 2.
71%.
Among them, many Chinese medicine stocks such as Xinguang Pharmaceutical, Tongrentang, and Hansen Pharmaceuticals hit their daily limit, which shows that the popularity of the Chinese medicine sector is still continuing
.
However, in recent days, individual stocks in the traditional Chinese medicine sector have shown signs of differentiation.
Flush data shows that on January 13, 2022, the traditional Chinese medicine sector fell by more than 3%.
Among them, Xintian Pharmaceutical, Yabao Pharmaceutical, Qianjin Pharmaceutical, Zhongxin Stocks that performed well in the early stage such as Pharmaceuticals, Lingrui Pharmaceuticals, and Guangyuyuan all fell by more than 6%
.
So, next, can the early rise of the traditional Chinese medicine sector continue? Many securities people have also given their views and suggestions
.
Among them, a number of brokerage research reports pointed out that, driven by years of favorable policies, the traditional Chinese medicine industry has ushered in new opportunities, and the valuation of traditional Chinese medicine companies has become more cost-effective, and they are optimistic about the follow-up market of the traditional Chinese medicine sector
.
For example, some securities sources said that with the support of the policy, the three sub-sectors of traditional Chinese medicine consumer goods, traditional Chinese medicine formula granules, and traditional Chinese medicine innovative drugs have all experienced general rises
.
Although the sector has begun to differentiate recently, in the long run, some sub-sectors are still worthy of attention
.
For example, in the field of traditional Chinese medicine consumer products, as the price of traditional Chinese medicinal materials ushered in, there is a certain price increase expectation for upstream and downstream products in the future
.
At the same time, the clearing of channel inventory is coming to an end, and the expected price increase will lead to faster inventory turnover in the downstream of the traditional Chinese medicine sector
.
In addition, coupled with the release of dividends from the reform of state-owned enterprises and the successive implementation of equity incentives, there are still opportunities for the development of traditional Chinese medicine consumer goods, and future performance is expected to explode
.
For another example, in the field of innovative traditional Chinese medicine, in 2021, there will be breakthroughs in the approval speed and quantity of innovative traditional Chinese medicines.
A total of 12 new traditional Chinese medicines will be launched, hitting a new high in the past five years
.
Soon after the start of 2022, another innovative Chinese medicine drug was approved for marketing
.
At present, the market is optimistic about the development space and prospects of innovative traditional Chinese medicine drugs
.
Some industry insiders also pointed out that the main reason for the recent increase in the price of Chinese medicinal materials is the imbalance between supply and demand.
On the one hand, since 2020, people have paid more attention to health preservation, and the demand for Chinese medicinal materials has continued to increase; The output of Chinese herbal medicines has been seriously affected
.
As people's health awareness continues to increase and consumption levels continue to upgrade, the demand for Chinese herbal medicines will also expand, and prices are expected to further improve in the future
.
For the continuity of the traditional Chinese medicine market, the person believes that there is a strong foundation
.
First, in the aspect of inheritance and innovation of traditional Chinese medicine, with the acceleration of the approval and review of traditional Chinese medicine, the number of approved innovative drugs of traditional Chinese medicine continues to grow; second, in terms of payment, the two departments have recently jointly issued the "Guiding Opinions on Medical Insurance Supporting the Inheritance and Innovation of Traditional Chinese Medicine".
”, increasing medical insurance on the payment side is conducive to the further inheritance and development of traditional Chinese medicine; third, in terms of centralized procurement, the implementation of centralized procurement of proprietary Chinese medicines is relatively mild, and the competition for many varieties is not fierce
.
However, there are also industry researchers who hold the opposite view, believing that the current round of the rise in the traditional Chinese medicine sector is mainly affected by multiple factors such as valuation, policies, and centralized procurement
.
Overall, it remains to be seen the sustainability of this round of market trends in the traditional Chinese medicine sector
.
The ups and downs have always been the law of the capital market.
It is recommended in the industry that no matter how the market changes, it is necessary to do a good job of diversifying the allocation of assets in order to withstand certain risks
.