中药：看好行业底部反转，国企改革与并购重组共振发展

Investment Rating - The report maintains a positive outlook on the Chinese medicine industry, indicating a potential bottom reversal driven by state-owned enterprise reforms and mergers and acquisitions [2][8]. Core Insights - The proprietary Chinese medicine market is nearly RMB 500 billion, with over 30% from the non-hospital market. The total market size of the Chinese medicine industry exceeded RMB 700 billion in 2023. The proprietary Chinese medicine market reached nearly RMB 500 billion, TCM cut crude drugs at RMB 217.3 billion, and Chinese medicine formula granules over RMB 50 billion. From 2017 to 2023, the non-hospital market CAGR was 3.0% [2][32]. - Demand is growing steadily, supported by the aging population and chronic disease medication needs. The non-hospital retail channel concentration benefits the OTC Chinese medicine brand field [3][32]. - State-owned enterprises dominate the industry, accounting for 63% of revenue, 61% of net profit attributable to shareholders, and 60% of market capitalization in 2023. Recent reforms have injected new momentum into the industry [3][32]. - The Chinese medicine sector has a high dividend level, with a dividend rate of 60.4% in 2023, significantly higher than the overall biopharmaceutical industry [4][32]. Summary by Sections Market Overview - The proprietary Chinese medicine market is close to RMB 500 billion, with the non-hospital market share increasing from 28% in 2017 to 32% in 2023. The total market size of the Chinese medicine industry surpassed RMB 700 billion in 2023 [2][32]. Demand and Supply Dynamics - The demand side shows resilience, with significant revenue and profit growth from 2019 to 2023. The supply side remains stable due to long product cycles and high brand barriers [3][32]. State-Owned Enterprises and Reforms - State-owned enterprises hold a significant position in the industry, with 21 A-Shares companies under state control, accounting for 30%. Their revenue and profitability advantages are notable, and recent reforms have led to growth through various strategic initiatives [3][32]. Financial Performance - The Chinese medicine sector's total revenue grew from RMB 148.6 billion in 2013 to RMB 372.1 billion in 2023, with a CAGR of 9.6%. The net profit attributable to shareholders increased from RMB 16.6 billion in 2013 to RMB 33.6 billion in 2023, with a CAGR of 7.3% [4][32]. Future Outlook - The Chinese medicine sector faced growth pressure in the first three quarters of 2024, with total revenue at RMB 270.6 billion, down 3% YoY. However, companies like Dong-E-E-Jiao and others achieved high growth through core product channel expansion [5][32].