Core Viewpoint - The Chinese medicine sector is experiencing a positive trend, with the Zhongzheng Traditional Chinese Medicine Index showing an increase, driven by policy benefits and the rapid modernization of classic formulas into contemporary medicine [1][2]. Group 1: Market Performance - As of November 12, 2025, the Zhongzheng Traditional Chinese Medicine Index (930641) rose by 0.57%, with notable increases in constituent stocks such as Zhongsheng Pharmaceutical (002317) up by 10.02% and Panlong Pharmaceutical (002864) up by 10.00% [1]. - The Chinese Medicine ETF (159647) also saw a rise of 0.29%, marking its sixth consecutive increase, with the latest price reported at 1.05 yuan [1]. Group 2: Industry Trends - There is a continuous release of policy benefits, leading to an accelerated layout of classic formulas by Chinese medicine companies, with products like Loquat Lung Cleansing Granules and Warming Meridian Decoction being rapidly transformed into modern formulations [1]. - Guojin Securities identifies the main investment opportunities in the pharmaceutical sector for 2025 as the innovation drug theme and the reversal of challenges in the left-side sector, emphasizing the potential of dual/multi-antibody drugs and addressing unmet clinical needs in chronic disease medications [1]. Group 3: Index Composition - The Zhongzheng Traditional Chinese Medicine Index includes companies involved in the production and sales of traditional Chinese medicine, with the top ten weighted stocks accounting for 54.92% of the index as of October 31, 2025 [2].

Core Insights - The report highlights the positive performance of the pharmaceutical index, with five out of six sub-industries recording positive returns this week [2] - The approval of the traditional Chinese medicine "Loquat Lung Clearing Granules," developed by Xiamen University and Shenwei Pharmaceutical, marks a significant achievement in the modernization of traditional medicine, showcasing the integration of ancient wisdom with modern technology [3][8] - The Chinese traditional medicine industry is entering a new phase of high-quality development, supported by government policies and technological innovations, with the market size expected to exceed 480 billion yuan by 2024 [9][10] Industry Performance Review - The pharmaceutical sector, particularly the chemical pharmaceuticals and traditional Chinese medicine sub-industries, showed strong performance with increases of 5.01% and 3.12% respectively [14] - The valuation levels for the chemical pharmaceuticals and biological products were the highest at 92.95 times and 74.63 times respectively, while traditional Chinese medicine had a valuation of 34.05 times [14] Industry Trends and Developments - The report discusses the implementation of the "Strong Foundation Project" by the National Development and Reform Commission, aimed at enhancing grassroots healthcare services and promoting the integration of traditional Chinese medicine into the healthcare system [21] - The introduction of policies in Henan Province to include suitable traditional Chinese medicine techniques in medical insurance coverage is expected to alleviate the economic burden on patients and promote the use of traditional medicine in chronic disease treatment [26][30]

Core Viewpoint - Tianjin Tasly Pharmaceutical has withdrawn its application for the registration of Loquat Lung Cleansing Granules due to the need for further improvement of the application materials [1] Group 1: Company Actions - The company submitted the drug registration application to the National Medical Products Administration in January 2024 and received acceptance [1] - The company has submitted a request to withdraw the drug registration application and has received a notification from the National Medical Products Administration agreeing to the withdrawal [1] - The total R&D investment for this project amounts to 11.3662 million yuan [1] Group 2: Impact on Operations - The withdrawal of the application is not expected to have a significant impact on the company's current and future production operations and performance [1] - The pharmaceutical industry is characterized by high technology and high risk, with long R&D cycles and multiple influencing factors [1]