WANNIANQING(SZ:000789) Sou Hu Cai Jing·2025-11-27 06:49Core Viewpoint - The demand for flu medications has surged in various regions of China, leading to a rebound in the traditional Chinese medicine (TCM) sector, with the TCM ETF (560080) showing significant trading activity and a total scale of 2.59 billion yuan as of November 26 [1][3]. Group 1: Market Demand and Performance - The flu season has officially begun in China, with monitoring data indicating that the peak typically occurs in mid to late December and early January [3]. - Orders for cold and flu medications on Meituan have more than doubled since November, with traditional Chinese medicine becoming a preferred choice for families due to its mild side effects [3]. - The TCM ETF (560080) has seen mixed performance among its constituent stocks, with notable gains from companies like Guangdong Wanyanqing and Tai Long Pharmaceutical, while others like Yiling Pharmaceutical and Baiyun Mountain experienced slight declines [3]. Group 2: Valuation and Historical Performance - As of November 26, the TCM ETF (560080) has a TTM price-to-earnings (P/E) ratio of 25.1, indicating it is cheaper than 77% of the time over the past decade, suggesting a favorable valuation for potential investment [5]. - The TCM index has shown negative returns year-to-date, with a decline of 2.23% in 2023 and a drop of 8.13% in 2024, indicating a challenging market environment [7]. Group 3: Future Outlook and Industry Trends - The TCM industry is expected to benefit from improved cash flow and stable profit growth, with a potential recovery in gross margins due to falling prices of raw materials [10][12]. - The upcoming release of the revised National Essential Medicines List is anticipated to positively impact companies with strong sales capabilities, such as Yiling Pharmaceutical and Jichuan Pharmaceutical, which are expected to see accelerated growth [13][14]. - Historical data suggests that inclusion in the essential medicines list can significantly boost sales for companies, as evidenced by past performance of products that entered the list [12].