Hong Kong Stock Concept Tracking | Hong Kong Releases Chinese Medicine Development Blueprint with Eight Major Goals to Promote High-Level Development of the Chinese Medicine Industry (with concept stocks)

The Zhitong Finance App learned that on December 18, the HKSAR Government officially released the “Blueprint for the Development of Traditional Chinese Medicine”, which covers 5 fields, 8 goals and 20 actions to promote the all-round, high-quality and high-level development of traditional Chinese medicine in Hong Kong. CITIC Construction Investment pointed out in a previous research report that short-term base pressure on the Chinese medicine industry is expected to ease, channel inventory clearance will accelerate, demand will pick up by the end of the year, and opportunities for subsequent improvements in fundamentals and valuations. Related targets: Chinese Traditional Chinese Medicine (00570), Tongrentang Chinese Medicine (03613), Gushengtang (02273), Baiyunshan (00874).

The eight major goals include optimizing excellent clinical services, including establishing the positioning of traditional Chinese medicine in the medical system, improving the quality and clinical benefits of traditional Chinese medicine services, and empowering the upgrading of traditional Chinese medicine services through technology; establishing a cross-professional service system, including deepening the cross-professional collaboration mechanism for traditional Chinese medicine services, deeply integrating into the medical system and cross-agency collaboration to strengthen the role of traditional Chinese medicine in primary care; leading the professional development of traditional Chinese medicine, including raising the professional competency standards of traditional Chinese medicine, and building a more comprehensive traditional Chinese medicine talent training system to enable the industry to continue to promote the professional development of traditional Chinese medicine.

In addition, improving the quality level of traditional Chinese medicine, including strengthening the quality management of traditional Chinese medicine, fully implementing the Proprietary Chinese Medicine Production Quality Management Code (GMP); helping establish international standards for traditional Chinese medicine, including making good use of government traditional Chinese medicine testing centers to establish traditional Chinese medicine standards, deepening cooperation between government traditional Chinese medicine testing centers and institutions in the Mainland and Greater Bay Area; driving innovation in the scientific research industry, including promoting innovative development and clinical trials of traditional Chinese medicine, and empowering the industry to cultivate traditional Chinese medicine professionals; and promoting traditional Chinese medicine culture, including popularizing knowledge about the correct selection of traditional Chinese medicine for disease prevention and treatment, and promoting cross-border cooperation to enhance traditional Chinese medicine cultural confidence;”, including Globally promote Hong Kong's traditional Chinese medicine service model and international cooperation, promote the international application of traditional Chinese medicine standards and testing technology, and create an international hub for information exchange and innovation cooperation in traditional Chinese medicine.

The Secretary for Health and Health of the Hong Kong Special Administrative Region Government, said that the first blueprint for the development of traditional Chinese medicine was announced today. The goal is to use traditional Chinese medicine so that citizens can enjoy better and more comprehensive medical services, improve their health standards and enjoy better services, and build Hong Kong to become a bridgehead for traditional Chinese medicine and traditional Chinese medicine to the world.

Recently, Hong Kong has continued to make major moves in the field of traditional Chinese medicine. At the beginning of December this year, the 7th Guangdong-Hong Kong-Macao Greater Bay Area Traditional Chinese Medicine Heritage, Innovation and Development Conference was first held in Hong Kong. About 800 traditional Chinese medicine experts, scholars, health officials and industry representatives from all over the world attended the conference to exchange views on the future direction of the global development of traditional medicine, clinical services and scientific research development of traditional Chinese medicine, modern research on traditional medicine, and traditional Chinese medicine standards.

On December 11, the first traditional Chinese medicine hospital in Hong Kong was officially put into operation. In the first year of operation, the hospital will mainly provide outpatient and day inpatient services, and comprehensively carry out six major branch services covering traditional Chinese medicine internal medicine, surgery, gynecology, pediatrics, orthopedics, and acupuncture and moxibustion departments. At the same time, it will also carry out 12 specialized programs for geriatric degenerative diseases and post-stroke rehabilitation. In September of this year, the Hong Kong Hospital of Traditional Chinese Medicine signed cooperation agreements with three universities, including Hong Kong Baptist University, the Chinese University of Hong Kong, and the University of Hong Kong, and officially became the traditional Chinese medicine teaching hospital for these three universities.

CITIC Construction Investment pointed out in the research report that the short-term base pressure on the Chinese medicine industry is expected to ease, channel inventories will be cleared at an accelerated pace, and they are optimistic about the recovery in demand by the end of the year and opportunities for subsequent fundamental and valuation improvements; the field of innovation will help build a second growth curve, and there is plenty of room for traditional Chinese medicine consumer goods companies to expand their brands.

Huajin Securities believes that it grasps the two main lines of “quality+innovation” in the traditional Chinese medicine sector. Fine traditional Chinese medicine has both medical value and consumer properties, has obvious brand effects, corresponds to high-net-worth customers, and has strong bargaining power; innovative traditional Chinese medicine is gradually entering a harvest period with the support of favorable policies and positive stimulation from the external environment. Innovative traditional Chinese medicine, such as improved new medicines of traditional Chinese medicine and famous ancient recipes, are expected to continue to accelerate clinically oriented development and achieve commercialization.

At this point, Huachuang Securities believes that the upward factors in the Chinese medicine sector far outweigh the downward factors: based on the major optimization of the chip structure, the continued friendliness of the policy, the elimination of channel inventory, and the slowdown in pharmacy channel integration, the bank is optimistic about the restoration market in the traditional Chinese medicine industry in 2026. The expected sequence of segmented sector recovery is as follows: In-hospital traditional Chinese medicine > Class 4 drugs > OTC generic medicines > supplements and high-value consumer traditional Chinese medicines. It is recommended to focus on targets where the policy benefits and the performance is rising from the bottom.

Related concept stocks:

Chinese Traditional Chinese Medicine (00570): It is a company mainly engaged in the manufacture and sale of traditional Chinese medicines. The company integrates pharmaceutical R&D, production and distribution business, and focuses on product development and manufacturing in the fields of traditional Chinese medicine, modern traditional Chinese medicine, and controlled release formulations. According to China Traditional Chinese Medicine's 2025 interim results, the turnover for the period was about 7.46 billion yuan, a year-on-year decrease of 11.0%. Gross profit was about RMB 3.63 billion, down 10.5% year on year; gross margin was 48.7%, up 0.3 percentage points from the same period last year.

Tong Ren Tang Chinese Medicine (03613): Tong Ren Tang is the oldest century-old brand in the Chinese medicine industry. It has a history of more than 350 years. It has products represented by Angong Niuhuang Pills, Tongren Dahuoluo Pills, Liuwei Dihuang Pills, Jin Qi Qi Pills, etc., as well as many classic medicines. It produces more than 400 types of proprietary Chinese medicines all year round, covering various fields such as cardiovascular, nourishment, clean-up, gynecology, and pediatrics.

Gushengtang (02273): Since this year, Gushengtang has continued to accelerate the pace of traditional Chinese medicine going overseas, adopted a “merger and acquisition+cooperation+self-construction” three-wheel drive strategy, and actively expanded the Singapore market. On October 22, Gushengtang and 1doc, a comprehensive digital medical platform in Singapore, reached a strategic cooperation. The two sides jointly established a joint venture, where Gushengtang holds 70% of the shares and is fully responsible for operation and management. The joint venture will divide independent traditional Chinese medicine diagnosis and treatment areas within 1doc's existing clinic network to jointly carry out traditional Chinese medicine business. Following the successful acquisition of Dazhongtang, Gushengtang will add 14 new outpatient institutions, which will help the company quickly build a large-scale service network in Singapore and enhance regional market coverage and operational synergy.

Baiyun Mountain (00874): Engaged in the medical services, traditional Chinese medicine health, modern pension, and medical device industries, wholesale, retail, and import and export of Western medicine, traditional Chinese medicine, and medical devices. Baiyunshan's results for the first three quarters of 2025 show that the group achieved operating income of 61,606 billion yuan, an increase of 4.31% year on year; net profit attributable to shareholders of listed companies was 3.31 billion yuan, an increase of 4.78% year on year; and basic earnings per share were 2.036 yuan.