The price of jujube kernels is soaring, and the traditional Chinese medicine sector is optimistic for a long time
"The price has been adjusted again recently. This particularly good quality jujube seed sold for 270 yuan per 100 grams, and last year it sold for 210 yuan; there are also more cost-effective jujube kernels, which now sell for 170 yuan per 100 grams, and last year it sold for 100 yuan." At a chain pharmacy in Guangzhou, a clerk told Guangzhou Daily All Media: "You can only compare horizontally and choose one you like; the price increase is too severe, and it can’t compare with before."
On October 8, the reporter visited the Qingping Chinese herbal medicine market in Guangzhou and found that although the price of jujube kernels in the wholesale market is far lower than the end point of the pharmacy, the price has also skyrocketed. Mr. Liu, a Chinese herbal medicine dealer, said that the price of jujube kernels has fluctuated again recently. Superimposed on the previous increase, the current price of domestic jujube kernels has risen by 50% to 70% year-on-year; the price of imported jujube kernels is lower, and the price per kilogram is 130 yuan, which is also 30% to 50% more expensive than last year.
There are ups and downs. With the arrival of the new production period this year, the market supply and demand have changed, and the prices of honeysuckle, Sichuan neem and other medicinal materials have fallen significantly. In the capital markets, institutions continue to be optimistic about the traditional Chinese medicine sector, believing that it has entered a boom cycle.
Text, Photo/Guangzhou Daily All Media Reporter, Tu Duanyu, Trainee Reporter, Lv Hui
Journalists visit:
The prices of some medicinal materials such as jujube kernels are still rising, and there are fewer individual customers in the market
Although it has reached the new season of jujube production, the price of jujube kernels has not declined due to the harvest of new fruits this year. In the past two months, the price of jujube kernels, the upstream raw material of jujube kernels, has risen from 5 yuan/catty to 15 yuan/catty, and the price of jujube kernels has risen. In the Qingping Chinese herbal medicine market in Guangzhou, jujube kernels have a certain price difference due to different quality, and the price per kilogram of jujube kernels is about 700 yuan to 1,000 yuan.
The reporter noticed that the Qingping Chinese herbal medicine market was slightly deserted, and the increase in the price of Chinese herbal medicine may put pressure on dealers in terms of sales and profits.
Mr. Liu said that since the price increase, the sales of jujube kernels in the store have dropped a lot, and his profit margins have been squeezed because he is afraid of losing customers and dare not raise prices too much.
A dealer surnamed Huang told reporters that few people came to buy goods in the store every day.
Another stall owner revealed that this year, there have been about 70% fewer individual customers in the store, and the sales of bulk goods have also been reduced by half.
Mr. Liu said that there are about 20 kinds of Chinese herbal medicines on sale in his store, of which 80% have seen price increases successively, and some herbs have risen more sharply than jujube seeds. "Compared with last year, the medicinal materials such as Ophiopogon, Codonopsis, and Angelica have doubled, and the cat’s claw grass has even increased several times. Codonopsis used to sell for more than 30 yuan per kilogram, but now it sells for 80 yuan per kilogram; cat’s claw grass used to sell for 50 yuan per kilogram, but now it sells for nearly 300 yuan per kilogram." Mr. Liu said that this situation has rarely been encountered in the store for more than 20 years.
The dealer, Miss Lin, told reporters that the price of source medicinal materials had to rise, and 90% of the varieties in the store had undergone price adjustments.
At the same time, the price of Chinese herbal medicines has risen and fallen, including honeysuckle and Sichuan neem. Miss Lin introduced that the price of honeysuckle last year was roughly 300 yuan per kilogram, but after the new production period this year, the price fell to less than 100 yuan per kilogram.
Class A share market:
Traditional Chinese medicine and retail pharmacies have performed prominently and are in the upward cycle of prosperity
At present, if the price of traditional Chinese medicine continues to rise in the short term, many pharmacies and pharmaceutical companies will not have a great impact because of their inventory reserves. However, if the price of traditional Chinese medicine continues to rise within one or two years, there will be greater operating pressure on manufacturers and merchants.
Affected by factors such as strong market demand and product price increases, traditional Chinese medicine companies had a good profit in the first half of the year.
Data show that in the first half of the year, class A share 73 listed Chinese pharmaceutical companies achieved a total revenue of nearly 200 billion yuan, and realized a net profit of 24.491 billion yuan. Among them, only 10 traditional Chinese medicine companies lost money, and the remaining 63 realized profits, accounting for about 86%. 53 companies achieved positive growth in net profit attributable to the parent in the first half of the year, accounting for more than 70%.
Zhongtai Securities Research believes that from the perspective of sub-sectors, the traditional Chinese medicine and retail pharmacy sectors have outstanding performance. In the first half of the year, the operating income of the traditional Chinese medicine sector was 196.232 billion yuan, an increase of 13.71% year-on-year, and the net profit deducted from the non-returned parent was 22.467 billion yuan, an increase of 34.66% year-on-year. In the second quarter alone, the net profit growth rate deducted from the traditional Chinese medicine sector was 38.5%. Overall, the sector continued the high prosperity trend in the first quarter of 2023. Excluding uncomparable companies, the net profit margin deducted from the traditional Chinese medicine sector reached 11.97% in the first half of 2023, which was higher than that from 2020 to 2022, and the profitability was greatly improved. The growth rate of inventories and accounts receivable was similar, indicating that the matching degree between the production end and
Policy benefits:
100 Traditional Chinese Medicine Varieties Recently Released Based on Evaluation Evidence
The traditional Chinese medicine sector is still welcoming favorable policies. Recently, the China Center for Evidence-Based Medicine of Traditional Chinese Medicine officially released 100 varieties of traditional Chinese medicine based on evaluation evidence, including Xuanfei Zhishou Mixture, Qianjin Capsules/Tablets, Musk Tongxin Dropping Pills, Pule’an Tablets, Powerful Loquat Dew, Bailing Capsules, Wuling Capsules, Shenmai Injection, etc. The production enterprises include Kangenbei, Qianjin Pharmaceutical, East China Pharmaceutical and many other enterprises.
"The product was selected into the list of 100 traditional Chinese medicine varieties based on evaluation evidence, and the gold content is very high, which is equal to the recognition and recommendation of authoritative departments. It has a positive impact on marketing activities and sales, and deserves special attention." A private equity person who has long tracked traditional Chinese medicine stocks said.
The Zheshang Securities Research Report believes that this catalog release is another major move in improving the clinical management system of traditional Chinese medicine and promoting the innovation and development of traditional Chinese medicine. It is also another promotion of the policy on the demand side of the industry, and is expected to catalyze the further expansion of the core varieties of the industry.
According to public information, the announcement of 100 varieties of traditional Chinese medicine based on evaluation evidence originated from the "Opinions of the Central Committee of the Communist Party of China and the State Council on Promoting the Inheritance and Innovation of Traditional Chinese Medicine" issued in 2019. The opinion clearly mentions that it is required to accelerate the construction of evidence-based medical centers for traditional Chinese medicine. In about 3 years, 50 varieties of traditional Chinese medicine treating dominant diseases and 100 suitable technologies and 100 varieties of traditional Chinese medicine with unique curative effects will be screened and released to the public in a timely manner.
The reporter observed that it is enough to buy moderately on demand, and consumers do not have to stock up in large quantities
The reporter noticed that in the context of multi-factor price fluctuations of traditional Chinese medicine, the construction and management of the entire industrial chain of traditional Chinese medicine enterprises is particularly important. More and more leading enterprises choose to build their own medicinal material bases, acquire medicinal materials and decoction pieces subsidiaries, build professional talent teams, and strategically reserve medicinal material resources to cope with price fluctuations, while maintaining the quality of medicinal materials.
Taking Guangyao Group as an example, following the launch of the 10,000-mu Banlangen GAP planting base project in Altay, Xinjiang in 2022, this year it has carried out industrial cooperation with the Kashgar region on the construction of a Chinese herbal medicine planting base. While assisting Xinjiang, the industry can also meet the company’s own raw material needs, and achieve greater "self-sufficiency" of medicinal materials, so that "there is grain in hand, and there is no panic in the heart".
Some experts also suggest that in order to prevent the prices of Chinese herbal medicines from fluctuating sharply, relevant departments should take comprehensive measures to regulate, establish a public trading market for Chinese herbal medicines raw materials in the large Chinese herbal medicines trading places in our country, and encourage growers (cooperatives) to directly connect with Chinese medicine production enterprises, reduce intermediate trading links, and put an end to hot money speculation.
For the majority of consumers, the advice of practicing pharmacists is to buy moderately on demand, without having to stock up in large quantities, first because the prices of many medicinal materials have stabilized, and second because some medicinal materials have higher storage requirements.