In recent years, the attitude of the policy side of traditional Chinese medicine has continued to be significant, and the development of the traditional Chinese medicine industry has been actively promoted. In the negotiation of medical insurance, all innovative drugs of traditional Chinese medicine approved in 2022 were included, which provided strong support for the innovative development of the traditional Chinese medicine industry. At the same time, the approval of TCM injections is also expected to be accelerated, and it is expected that the approval will be obtained in a shorter time. In addition, the list of basic drugs is expected to be tilted towards traditional Chinese medicines, which will further promote the wide application and development of traditional Chinese medicines.
1: Comparative advantage at low valuations.
Currently, the Chinese medicine sector is at a low valuation, which provides a comparative advantage for its future growth. In the context of weak consumption, the rigid demand attribute of traditional Chinese medicine is more apparent, and its robustness and dividend rate are higher than those of the food and beverage industry. Therefore, investors can consider looking for potential investment opportunities in the TCM sector.
2: Incremental space is displayed.
With the expansion of the basic drug catalog, the volume cycle of traditional Chinese medicine innovative drugs, and the volume of traditional Chinese medicine injections after the restriction is lifted, the incremental space of the traditional Chinese medicine industry is emerging. This is expected to lead to the accelerated growth of corporate performance and bring more investment opportunities to investors.
3: Pay attention to ideas.
Catalogue of basic drugs and flexible targets of innovative drugs of traditional Chinese medicine: such as Jichuan Pharmaceutical, Guizhou Sanli, Tasly, Fangsheng Pharmaceutical, Yuekang Pharmaceutical, Kangenbei, Panlong Pharmaceutical and other companies, these companies have high innovation ability and market potential in the field of traditional Chinese medicine.
Flexible allocation of state-owned enterprise reform: companies such as KPC and Taiji Group, which are undergoing state-owned enterprise reform and are expected to release more potential.
Stable allocation of low valuation and high dividends: such as Sunflower Pharmaceutical, Lingrui Pharmaceutical and other companies, these companies have high dividend rates and low valuations, which are suitable for stable investor allocation.
Medical insurance and the target of the lifting of restrictions: such as Kangyuan Pharmaceutical, Shanghai Kaibao, Jiuzhitang, China Resources Sanjiu and other companies, the products of these companies are expected to obtain greater market opportunities after the medical insurance policy or the lifting of restrictions.
4: Risk warning.
Investors need to pay attention to risk factors such as the implementation of policies is less than expected, and the growth rate of the industry is less than expected. At the same time, it is also necessary to pay attention to the company's fundamentals, including financial status, business development prospects, etc. When making investment decisions, it is advisable to seek the advice of a professional financial advisor.
Note: The data and opinions in this article are provided by the Guosheng Pharma team and are for reference only.
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