BEIJING, April 8 (Xinhua) -- Listed traditional Chinese medicine companies are seeking business transformation to relieve revenue pressure.
Major listed traditional Chinese medicine companies including Guangzhou Baiyunshan Pharmaceutical Holdings (Baiyunshan), Yunnan Baiyao Group, Beijing Tongrentang, and China Resources Sanjiu Medical & Pharmaceutical reported 42.23 billion yuan, 26.71 billion yuan, 14.21 billion yuan and 13.43 billion yuan of revenue respectively in 2018, up 101.55 percent, 9.84 percent, 6.23 percent and 20.75 percent, according to the companies' annual reports.
Despite the positive performance, Chinese medicine companies saw the retail sales of Chinese patent medicines grow by less than five percent in 2018, which escalated market competition, according to Sinohealth CMH, a research institute in China.
The weak growth may be attributed mainly to lack of innovation in Chinese medicines, coupled with shortage of relevant talents and traditional Chinese medicine hospitals, said Zhang Keran, a pharmaceutical industry analyst of Huarong Securities.
To drive up revenue against the backdrop of China's ongoing medical reform, Chinese medicine enterprises take different approaches. Some try to accelerate innovation-driven transformation, some turn to expand business in sectors of food and daily supplies, while others may speed up mergers and acquisitions, analysts told China Securities Journal.
For example, Baiyunshan invested 585 million yuan in research and development (R&D) in 2018, which showed a year-on-year increase of 56.85 percent and accounted for 1.39 percent of the company's total revenue last year.
Yunnan Baiyao Group eyes on building health platform and ecology for medium- and long-term development. Its toothpaste business maintained a rapid growth in 2018, with a market share ranking second in China and first among national brands. The company plans to capitalize on the trend of consumption upgrading by enriching its oral care, washing and skin care products at faster pace.
Traditional Chinese medicines are likely to take the form of medicine particle prescription in the long run, said some industry insiders. And leading enterprises are expected to take a larger share of the Chinese medicine particle prescription market, which grows rapidly in recent years and enjoys favorable policies, according to Xingye Securities. (Edited by Su Dan)
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