[China Glass Network] Recently, the EU "Traditional Botanical Drug Directive" has been fully implemented, and the future export of Chinese medicine enterprises has received market attention. In this regard, a number of large listed Chinese medicine companies executives told China Securities Journal that because the export of the EU accounted for a small overall market share, the restrictions have little effect.
The EU market is relatively small
Tong Ren Tang is a listed Chinese medicine company with a top-ranked Chinese medicine in 2010. The company’s secretary-general told the China Securities Journal that although the EU restrictions had a certain impact, Tong Ren Tang’s business volume in the region was small and affected, and the company had responded to customers in the region, increasing shipments in advance and increasing Reserves leave room for adjustment for possible market changes.
A relatively new research report by Tianxiang Investment Consultant shows that more than 75% of Tongrentang's proprietary Chinese medicines are concentrated in Southeast Asia, Japan, the United States and other markets, and the proportion of exports to the EU is very low.
The heads of the Chinese medicine companies such as Pien Tze Huang, Zhongheng Group, Dong'e Ejiao, Jiuzhitang, and Essence Pharmaceuticals, or the Secretary-General of the Board of Directors also generally treated the “Directivesâ€. According to reports, the sales of Zhongheng Group and Jiuzhitang products are mainly based on the domestic market, so the restrictions are “not very influentialâ€. Although Jiuzhitang has a certain market share in Japan and Southeast Asia, it has a small proportion. The largest export volume of products is Pien Tze Huang. The company said that exports and domestic markets account for half of each, but exports are mainly in Japan, South Korea and Southeast Asia, and there are few European markets. Essence pharmaceuticals account for a certain proportion of exports to Europe, but the export products are mainly chemical drugs. The company's four chemical products, such as phenobarbital and phenylbutazone, have obtained European COS certification, and the proportion of Chinese medicine products has never been large. Dong'e Ejiao related people told reporters that the company's products are still in short supply in China and will not be affected by the EU's "instructions."
Asian demand continues to rise
According to the data of China Chamber of Commerce for Import and Export of Medicines and Health Products, from January to February 2011, China's exports of traditional Chinese medicine products were mainly targeted at the Asian market, with the export volume accounting for 77.97% and the export value accounting for 59.49%. The EU market accounted for the second largest share of exports, accounting for 10.02%, and the export value accounted for 17.6%. Among the top 20 countries or regions in China's Chinese medicine export market, Japan, Hong Kong, South Korea, Vietnam, Taiwan Province, Malaysia, India, Singapore, Indonesia, and Thailand account for 57.96% of China's Chinese medicine exports. Among them, the export value to a country in Japan accounted for 16.92%, slightly lower than the level of 17.6% for the EU. Insiders pointed out that compared with the Asian market, Chinese medicine companies lack the motivation to enter the EU market, and the registration cost is too high, so the enthusiasm for traditional medicine registration is not high.
Prior to Huachuang Securities, analysts believed that the demand for Chinese medicine products in the domestic market was gradually increasing. As the national medical reform and Chinese medicine products were included in the national essential medicines catalogue and medical insurance catalogue, the basic needs of the products were expanded. In the past two years, the domestic Chinese medicine market has received increasing attention from the industry. Tong Ren Tang recently said that in the next five years, the Chinese medicine industry will usher in an unprecedented development opportunity with the support of the government, and the company will achieve rapid development; the Zhongheng Group's Yanzhou Pharmaceutical signed a five-year production and sales with the step group at the end of last year. Cooperation, the company achieved a net profit of 216 million yuan in the first quarter of 2011, a year-on-year increase of 301%; in view of the strong demand for products, Dong'e Ejiao plans to invest 200 million yuan to build seven raising bases during the 12th Five-Year Plan period; Essence Pharmaceuticals plans to invest nearly 100 million yuan to build a Chinese herbal medicine base and improve the industrial chain of Chinese medicine business. The development of Chinese medicine industry has caused a corresponding change in market supply and demand. In recent years, Pien Tze Huang and Dong E-Jiao have repeatedly raised prices.
Tong Ren Tang’s secretary-general told reporters that the “instruction†is rigid, but the market is flexible. Some people in the industry believe that China should increase its support for Chinese medicine exports in terms of policies, and the dialogue between governments is more conducive to solving problems. From the perspective of the past two days, the Chinese herbal medicines and Chinese patent medicine processing sectors have not been hit by the restrictions. Only with the rhythm of the market, the market's expectations for the Chinese medicine industry have not changed.
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