Tianjin ZhongXin is one of China’s top four TCM product exporters with a brand portfolio that includes three-centuries-old brands hailed as China’s Time-honoured Brands, as well as 851 patents under its arm.
The group has recently increased the price of its top drug – Su Xiao Jiu Xin Pill – and hospitals in 20 out of 23 provinces are accepting of the 30% price hike.
This pill accounted for close to 30% of the group’s 2016 revenue.
In a Wednesday report, analyst Edison Chen says, “Demand for the pill should hold steady given low price elasticity and there is room for further price hikes even while still qualifying as a low-cost drug (
Tianjin ZhongXin’s latest round of SOE has opened up possibilities for increase in dividends, delisting of S-shares, asset restructuring and greater private ownership.
China has plans to grow TCM as part of its healthcare system, complemented by Western medicine. China plans to also tap on the broader Belt and Road Initiative and increase TCM exports, while aiming to receive US FDA and EU EMA approval.
“While the increased interest will bring about new competition, Tianjin ZhongXin’s tremendous brand equity acts as an economic moat that should allow it to capture more of this enlarged pie,” says Chen.
Shares in Tianjin ZhongXin are trading at US$1.08 as of 11.02am.
