ZUO LI YAO YE(SZ:300181) Xiangcai Securities·2025-08-03 10:36Investment Rating - The industry rating is maintained at "Overweight" [8] Core Views - The Chinese medicine sector saw a 3.12% increase last week, with the overall pharmaceutical sector rising by 2.95% [2] - The PE (ttm) for the Chinese medicine sector is 29.58X, up 0.89X week-on-week, while the PB (lf) is 2.45X, up 0.08X week-on-week [3] - The "Thousand-Year Herbal" initiative aims to establish a comprehensive communication system for the entire lifecycle of Chinese medicine, focusing on resource protection, quality control, and technological innovation [5] - The recent implementation of centralized procurement for Chinese medicine pieces is expected to drive industry standardization and enhance competitive advantages for companies with strong management and innovation capabilities [6] Market Performance - The Chinese medicine II index closed at 6845.97 points, reflecting a 3.12% increase, while the chemical pharmaceuticals index rose by 5.01% [2][14] - The performance of leading companies includes Qizheng Tibetan Medicine and Zhongsheng Pharmaceutical, while companies like Qidi Pharmaceutical and Kangmei Pharmaceutical lagged behind [2] Valuation - The Chinese medicine sector's PE (ttm) is at 29.58X, which is at the 35.13% percentile since 2013, while the PB (lf) is at 2.45X, at the 8.52% percentile since 2013 [3] Supply Chain Insights - The market for Chinese medicinal materials is currently balanced, with the price index remaining stable despite fluctuations in supply due to extreme weather [4] Investment Suggestions - The report suggests focusing on three main investment themes: price governance, consumption recovery, and state-owned enterprise reform [11] - Companies with strong R&D capabilities and unique products are recommended, along with those less affected by centralized procurement [12]