Slowdown In The Chinese Patent Medicine Industry, Sad Day - Proprietary Chinese Medicines, Chemical

Recently, the National Bureau of Statistics published 1 May 2008

, Pharmaceutical Industry operating data. Pharmaceutical Industry in total sales income of 271.777 billion yuan, up 29.43 percent; total profit (before tax, excluding investment income) has reached 26.044 billion yuan, up 45.12% over last year, gross margin rose 0.5 percentage points year on year, profitability appears recovery situation. However, in the context of inflation, sales and profit growth not expected to be down compared to the previous two months.

The performance of each sub-industry and industry generally consistent with the overall operating trends, but there are structural differences.

Breakdown of view, the chemical API Performance is the best of all sub-sectors. Sales up 32.2%, gross margin improved 2.1%, total profit up 85.2%. Reflected in the large API The case of rising prices, rapid improvement in gross margin, profit rose far more than income growth. Compared with the previous two months, the profit growth accelerated.

Chemistry Preparation Sub-sector expansion in the context of demand, sales revenue grew 27.4%, gross margin edged down 0.4 percentage points, the overall management efficiency in the industry to upgrade the case, three rates down and boost net income up together 43.7% .

Biology, and biotechnology sub-sectors in the economy high, sales revenue, profit up 29.6% and 57.0%. This year in February and May data, gross margin increased year on year respectively, -1.52 and 1.3 percentage points, gross margins were significantly recovered.

Contrast, the performance of proprietary Chinese medicines industry clearly slightly inferior, the industry growth rate obviously slowed down. Statistics show that Chinese patent medicine industry from 1 May main income 57.805 billion yuan, up 24.2%, the profit amounted to 5.462 billion yuan, up 16.2%, gross margin declined 0.7 percentage points. Can be seen that the profit margins of proprietary Chinese medicines are being compressed, the future will be greater pressure on costs and funding. Meanwhile, with the February data, compared to net profit also declined faster growth.

In fact, the Chinese patent medicine industry, slightly behind the industry boom level of the overall level of starts last year. According to the first 11 months last year, an industry run data, Traditional Chinese medicine Sub-industry sales growth below the industry average growth rate of 3.68 percent. This is mainly proprietary materials?? Chinese herbal medicines The result of price increases, showing that the industry boom and the price of Chinese herbal medicines negative correlation, this year, this trend still continued.

Example, has recently been reported, Baiyun Mountain and yellow Chinese medicine raw materials, export of raw materials Granule one of honeysuckle rose to 20 yuan from 60 yuan, or nearly 300%; Banlangen raw materials up from 6 yuan more to more than 8 yuan, up more than 30%; compound Danshen Salvia raw materials prices doubled since last year's growth, rose about 10% this year. Especially with the authorities to further tighten the management of endangered Chinese medicinal herbs, objectively intensified this trend.

Affected, some enterprises began to quietly raise ex-factory price. "Some of the brand purchase price rose 4% to 6%, and even some large brand rose 15% to 20%." For example, in Chongqing, the commercial channels, Ageratum purchase price of liquid into 3.3 from 2.8 yuan yuan than the retail price even higher before. Industry product prices

but limited, corporate profits are high costs and the erosion rate has not changed, which is directly reflected in the concept of industry data. Analysts in the industry view, lies in a more profound impact, price increases may lead to market differentiation.

Ping An Securities constituent stocks on the Shanghai and Shenzhen 300 major manufacturing companies in 2008, the forecast net profit growth in 2009, the proprietary manufacturing division more. East E-Jiao in 2008 is expected to maintain 46% profit growth, profit growth will Tongrentang down 9%.

States gold stock held in the recent mid-term strategy for 2008 will be further noted that since the first quarter of 2007 to the present, those who rely heavily on the unique and valuable medicinal herbs in Chinese medicine, gross margins have declined, and hence the price and other factors and the medicines up to be ignored. Of course, modern technology of a modern Chinese medicine, gross profit margin was not affected.

The costs continue to rise, countries that have three gold securities can try the directions: first, the price adjustment, directly transferred to the downstream pressure, this is the most significant, but is more difficult for drug companies, because only companies with independent pricing; second, internal digestion, which is the most realistic means, there are many excellent companies are gradually raised ex-factory price, with the channel management capabilities to resolve the prices of factors; the third in the long term to look, take active medicinal management, including the development of planting base, training providers, this is the future direction of development.

by: gaga

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