Core Viewpoint - The recent announcement by the National Medical Products Administration and the General Administration of Customs to allow the import of natural bezoar for traditional Chinese medicine production has not led to significant market enthusiasm among midstream enterprises, as they continue to face challenges in sales channels and cost pressures [2][3][4]. Group 1: Import Policy and Market Reaction - The import ban on natural bezoar has been lifted, allowing imports from countries free of mad cow disease, with a pilot program set for two years in 12 regions [2]. - Despite the lifting of the ban, stock prices of key companies relying on natural bezoar as a raw material showed minimal increases, with most experiencing declines shortly after the announcement [3]. - The global supply of natural bezoar remains limited, as major exporting countries are not included in the approved list, leading to ongoing supply-demand imbalances [3][6]. Group 2: Supply and Demand Dynamics - Natural bezoar, a rare and expensive traditional Chinese medicine ingredient, has seen its price surge from 170,000 yuan per kilogram in 2016 to around 1.6 million yuan in 2024, reflecting a nearly tenfold increase over nine years [2][5]. - In 2023, China's production of natural bezoar was approximately 5.58 tons, while the demand reached 10.95 tons, indicating a significant supply shortfall [4][5]. - The limited supply is exacerbated by the decline in the number of working cattle and changes in farming practices, which reduce the formation of bezoar [4]. Group 3: Financial Performance of Key Companies - Companies like Tongrentang and Pizhouhuang have reported revenue growth but declining profits due to rising raw material costs, with Tongrentang's net profit down 8.54% year-on-year [9][10]. - Pizhouhuang has also faced challenges, with its core product's price increasing significantly without corresponding profit growth, leading to inventory issues [9][10]. - The retail pharmacy sector is experiencing a contraction, with thousands of stores closing, further complicating the sales environment for these companies [10]. Group 4: Strategic Responses - In response to market challenges, companies are increasing marketing expenditures and opening new stores, but these efforts have not yet translated into substantial revenue growth [11]. - The ongoing inventory issues faced by companies like Tongrentang and Pizhouhuang highlight the shifting preferences in the market, necessitating clinical validation of product efficacy to rejuvenate sales [11].