Chinese medicine greatly increases price to go luxury

A few days ago, Ding Dingdan, who was under the command of Tung Shing's Shanxi Guangyuan Yuanguo Medicine, debuted at a luxury exhibition held in Shanghai, and was closely related to the internationally renowned luxury brand lv. This seems to indicate that some Chinese medicine products have begun to seek the development path of high-end populations. Many Chinese herbal medicine varieties have been substantially increased in price in recent years or can be used as a supporting fact.

Create "lv" in medicine

Dong'e Ejiao (000423) experienced four price adjustments in 2010 and attracted wide attention from all walks of life. In 2011, once again raised the price of products by as much as 60%. In this phenomenon, analyst Zhang Shaokun of AVIC Securities Consumer Products Industry believes that E-Jiao is taking the luxury goods route. .

According to industry insiders' analysis, there are two main reasons for the frequent increase in prices of Ejiao. On the one hand, the cost increases, and on the other, it is driven by market demand. But no matter what, a box of 500 grams of donkey-hide gelatin has risen from more than 400 yuan in the first half of last year to 750 yuan now. Dong'e Ejiao has become a Chinese luxury goods.

In response to Dongjia Ejiao's continuous price increase, many analysts believe that Dong-E E-Jiao is thriving in the E-Jiao market. Given the company’s strong product pricing capabilities, there is a possibility that Dong’s products will continue to increase prices in the future. In recent years, Dong'e Ejiao has increased its marketing and promotion of e-Jiao series products by advertising in well-known media and increasing the academic promotion of medical terminals. At the same time, the company implemented "control marketing" management, through controlling the number of dealers, controlling channel prices, controlling terminal retail prices, etc., to promote the flattening of channels, enhance control over distribution channels, and try to keep prices up while maintaining The continuous increase in sales.

According to Zhang Shaokun, Ejiao belongs to the blood-enhanced Saints, and has been inherited for thousands of years. Now all the adjustments in business operations, as well as the logic of strategic operations, should be fundamentally different from health care products. It is based on the logic of luxury goods. According to the expected net profit growth in 2011, East E-Jiao (000423) is expected to increase by 30% to 50%. Moreover, with the rapid growth of the Ejiao consumer market and the continuous shrinkage of upstream donkey skin resources, the product supply gap will further expand, enabling Dong'e E-Jiao to have strong product pricing capabilities.

The top-notch variety is indisputable. In fact, there are not only a few varieties of Chinese medicine that are intended to be “luxury”, but it is not unusual for Ding Kundan to see the country’s secret formula at the luxury goods show. The annual output of valuable Chinese medicine is very limited, similar to the scarcity of donkey-hide gelatin, which is the main raw material of donkey-hide gelatin. The classical Chinese medicine, Dingkun Dan, not only pays attention to the craftsmanship but also appears to be long. The raw material medicine is more precious, and the deer antler selection must use the tip of the tender fur. The safflower must use the wild top grade imported from Iran to ensure the efficacy of the drug.

In addition, Pien Tsz-Tsang, one of the few top secret Chinese medicines in China that enjoys independent pricing power, is constantly adjusting its market price upwards. In October last year, Pien Tze Huang (600436) made a substantial price increase since the company's listing, raising the domestic price of Pien Tsai from $220 to $260, and the export price from $24 to $30. The rate of increase has reached the largest historical 25%. Compared with the domestic price of NT$130 for tablets in March 2005, the price of 260 yuan per capsule has just doubled.

Ping An Securities expects the new round of price increase will be at the beginning of this year, with a margin of approximately 10% to 15%. It is understood that the main component of Pien Tze Huang is musk, bezoar, snake gall, Panax notoginseng and so on. The increasingly scarce herbs, such as natural musk and natural bezoar, belong to the state's conservation resources and are subject to strict national quota restrictions. According to relevant regulations, at present, only four medicines, namely Pien Tze Huang and An Gong Niu Huang Wan, can use natural musk. Therefore, as a raw material, Pien Tze Huang, the annual output and sales are subject to control, so under the premise of limited raw materials, market demand and at the same time, the price has been rising is an inevitable trend.

As of February 13th, a total of 90 organizations had made predictions on the financial performance of Pioneer Group in 2011. The average net profit forecast was 246 million yuan. According to the agency's forecasted average, the 2011 net profit increased by 26.48% over the previous year. Some institutions believe that the price of Pien Tze Huang will continue to increase with the shortage of natural musk sources, and it is expected to double its price within three years. The company's performance is expected to maintain an increase of around 50%.

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