The Zhitong Finance App learned that Guolian Securities released a research report saying that maintaining the “buy” rating of Chinese traditional Chinese medicine (00570), the national standard continued to announce marginal industry improvements, adjusted net profit for 2023-2024 to 20.02/2,651 billion yuan, adding net profit to the mother in 2025 to 3.445 billion yuan, and a 3-year CAGR of 65.19%. As the country continues to promote the increase in the penetration rate of traditional Chinese medicine, the company is the leader in formulating granules and the advantages of the entire Chinese medicine industry chain are industry-leading, with a target price of HK$5.48.

According to the report, the National Drug Administration issued the “Notice on Ending the Pilot Work on Chinese Medicine Formulation Particles”. In 2022, the industry entered a transition period between enterprise standards to national or provincial standards. Due to insufficient number of standards and a short-term decline in demand for clinical terminals, the company's formula granule business declined in 2022. As national and provincial standards continue to be announced, as of March 24, 2023, the number of registered sales of formula granules on the Guangdong side of the company reached 25 provinces, and the number of provinces with more than 300 registered sales in Tianjiang, Jiangyin reached 24. At the same time, combined with the increase in routine outpatient volume in 2023, the company's formula granule performance in 2023 is expected to grow rapidly.

The bank mentioned that the country continues to increase the penetration rate of traditional Chinese medicine. At the same time, after the State Council issued an outpatient aid system, as of March 24, 2023, 13 provinces and cities supported the inclusion of traditional Chinese medicine outpatient or day care in the scope of integrated medical insurance payments. The bank believes that traditional Chinese medicine is expected to develop rapidly on the medical institution side, and demand for traditional Chinese medicine tablets, formula granules and superior proprietary Chinese medicines may rise rapidly. As a leading enterprise in formula pellets, the company lays out the entire traditional Chinese medicine industry chain, including the cultivation of Chinese herbal medicines, tablet production, proprietary Chinese medicine, health of traditional Chinese medicine, and the National Medical Center, etc., to create a closed-loop development model for the traditional Chinese medicine industry, which is expected to drive long-term growth in the company's performance.