--- title: "Traditional Chinese medicine concept stocks are active! With frequent policy tailwinds, is a rebound expected by 2026?" type: "News" locale: "en" url: "https://longbridge.com/en/news/275122974.md" description: "Chinese medicine concept stocks are performing actively in the A-share and Hong Kong stock markets, with multiple stocks such as TY PHAR. and YONGTAI TECH. hitting the daily limit. Favorable policies are emerging, as the Ministry of Industry and Information Technology and seven other departments released the \"Implementation Plan for High-Quality Development of the Traditional Chinese Medicine Industry (2026-2030),\" setting goals for the future development of the traditional Chinese medicine industry, including the construction of high-standard traditional Chinese medicine raw material production bases and smart factories. The \"Regulations on the Implementation of the Drug Administration Law,\" announced on January 27, also provides a new review system for the research and development of traditional Chinese medicine" datetime: "2026-02-06T11:59:33.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/275122974.md) - [en](https://longbridge.com/en/news/275122974.md) - [zh-HK](https://longbridge.com/zh-HK/news/275122974.md) --- # Traditional Chinese medicine concept stocks are active! With frequent policy tailwinds, is a rebound expected by 2026? On February 6, the Chinese medicine concept stocks in both A-shares and Hong Kong stocks collectively rose, with active trading in the sector. In A-shares, TY PHAR. (002728.SZ), YONGTAI TECH. (002326.SZ), and Hansoh Pharmaceutical (002412.SZ) all hit the daily limit; ZhenDong Pharmaceutical (300158.SZ) surged 13.24%, WanBangDe (002082.SZ) rose 7.39%, Enwei Pharmaceutical (301331.SZ) increased by 7.08%, YueWannianQing (301111.SZ) climbed 5.62%, QiZheng Tibetan Medicine (002287.SZ) went up 5.37%, and DaRenTang (600329.SH) gained 4.01%. The Hong Kong market also showed strength, with WeiYuanTang (00897.HK) rising 7.25%, ZhongZhi Pharmaceutical (03737.HK) increasing 4.35%, KangChen Pharmaceutical (01681.HK) up 2.92%, TongRenTang Technology (01666.HK) gaining 1.38%, BaiYunShan (00874.HK) rising 1.05%, and TongRenTang GuoYao (03613.HK) following suit. **Frequent Policy Benefits Released** The activity in the Chinese medicine sector is closely related to the recent release of macro policy benefits. On February 5, the Ministry of Industry and Information Technology and eight other departments jointly issued the "Implementation Plan for the High-Quality Development of the Chinese Medicine Industry (2026-2030)", outlining a "roadmap" for the development of the Chinese medicine industry over the next five years from a full industry chain perspective. The "Plan" sets quantitative goals around dimensions such as raw material supply, innovation capability, and manufacturing level: by 2030, cultivate 60 high-standard Chinese medicine raw material production bases, build 5 centers for innovation in the Chinese medicine industry, newly cultivate 10 major varieties of traditional Chinese medicine, promote the transformation of Chinese medicine preparations in medical institutions into innovative Chinese medicines, revise and formulate 10 industry standards related to intelligent technology in the Chinese medicine industry, publish 20 typical cases of digital transformation and upgrading, build 20 smart factories, and cultivate 10 green factories. On January 27, the "Implementation Regulations of the Drug Administration Law of the People's Republic of China" were officially announced, in conjunction with the "Special Regulations on the Registration Management of Traditional Chinese Medicine" published in 2023, establishing a unique evaluation system for traditional Chinese medicine that combines traditional Chinese medicine theory, human experience, and clinical data, clarifying the research and development paths for classic prescriptions and improved new drugs, and emphasizing clinical benefits and risk assessment. The regulations require Chinese medicine decoction pieces and formula granule production enterprises to establish a MAH full lifecycle responsibility system to ensure the safety, effectiveness, and traceability of Chinese medicine. Analysts point out that 2026, as the starting year of the "14th Five-Year Plan," will usher in a new strategic opportunity period for the revitalization and development of traditional Chinese medicine. The recent series of policies not only clarifies the direction and goals for the development of the Chinese medicine industry but also injects strong confidence into the market. In addition, the expected adjustment of the new round of essential drug catalog in 2026, the inclination of medical insurance payment policies towards traditional Chinese medicine, support for innovative Chinese medicines, and the continuous release of benefits from state-owned enterprise reforms all provide strong policy catalysts for the rebound of the Chinese medicine sector **2025** **Overall Performance Under Pressure** It should be noted that despite continuous favorable policies, the performance of the traditional Chinese medicine sector has shown significant differentiation over the past year, with overall performance being relatively weak. According to Tonghuashun data, as of now, 29 traditional Chinese medicine stocks have disclosed their performance forecasts for 2025. Among them, only 12 companies are expected to achieve positive profits, while 17 are projected to incur losses. In terms of growth rates, 13 companies are expected to see profit recovery, including 6 companies with significant profit increases, 3 companies turning losses into profits, and 4 companies with narrowed losses; another 16 companies are expected to see profit declines. Regarding the overall pressure on performance, analysts have pointed out that the main reason is the relatively weak retail segment of pharmaceuticals, fluctuations in the sales of over-the-counter (OTC) products outside hospitals, and a lower overall incidence of influenza compared to the previous year, leading to insufficient terminal demand. The performance of some companies related to antiviral, respiratory, and digestive traditional Chinese medicine products has been significantly affected by inventory destocking or base effects. **Institutions: Is the Sector Expected to Experience a Bottoming Recovery?** Based on the views of multiple brokerages, there is a generally optimistic outlook for investment opportunities in the traditional Chinese medicine sector in 2026. Xiangcai Securities recently pointed out in a research report that the traditional Chinese medicine industry is building a "hospital + non-hospital" coordinated development pattern, and strengthening the non-hospital market, especially e-commerce, is a common characteristic of companies with better performance. **In 2026, against the backdrop of advancing centralized procurement, the traditional Chinese medicine industry may continue to show structural differentiation, and traditional Chinese medicine companies may seek new performance growth points through efforts in the non-hospital market, expanding the industrial chain, strengthening innovation and research and development, and embracing innovative drugs**. It is recommended to pay attention to the performance announcements of listed traditional Chinese medicine companies in 2025. In addition, the basic drug catalog has completed preliminary selection by experts, and it is recommended to continue monitoring the progress of adjustments to the basic drug catalog. The firm suggests focusing on three main lines: **1) Price Governance**. Under price governance, the general direction of policies such as centralized procurement, medical insurance negotiations, and drug price ratios is to lower prices, which may lead to more pronounced differentiation within the industry, with competitive varieties and companies likely to achieve volume growth through price reductions. **2) Consumption Recovery**. With consumption recovery, there is optimism about the recovery of sales of consumer-oriented traditional Chinese medicine products driven by macroeconomic warming and domestic demand stimulation. **3) State-Owned Enterprise Reform**. The proportion of state-controlled enterprises in the traditional Chinese medicine industry is significantly higher than the overall level in the pharmaceutical industry, and deepening state-owned enterprise reform presents investment opportunities from performance increments achieved through quality improvement and efficiency enhancement. **Guojin Securities' research report believes that the traditional Chinese medicine sector is expected to welcome opportunities for a bottoming recovery in 2026**. The firm pointed out that after the continuous destocking and performance base digestion in 2024-2025, as well as the nearing expiration of peak shipment periods, coupled with a significant increase in influenza incidence in Q4 of 2025, there is hope for further promotion of channel inventory digestion. Outside hospitals, **the subsequent performance of influenza-related OTC traditional Chinese medicine products is expected to improve, and companies with light inventory pressure are likely to restore normal shipping rhythms, with performance expected to warm up ahead of schedule**. Inside hospitals, the basic drug catalog is expected to be updated, and referencing the subsequent volume performance of newly added exclusive traditional Chinese medicine products in the 2018 version of the national basic drug catalog, **companies with potential for inclusion in the new version of the basic drug catalog are worth paying attention to** ### Related Stocks - [002728.CN](https://longbridge.com/en/quote/002728.CN.md) - [002326.CN](https://longbridge.com/en/quote/002326.CN.md) ## Related News & Research - [CATL, Yongtai Sign Second Battery Materials Supply Deal This Month](https://longbridge.com/en/news/290940150.md) - [05:52 ETRisen Energy Showcases Full-Scenario Innovations at Intersolar Europe 2026](https://longbridge.com/en/news/290674508.md) - [Absa lists ZAR 2.58 billion AGF08-AGF10 floating-rate FLAC callable notes on JSE](https://longbridge.com/en/news/290944551.md) - [Cloudberry Clean Energy secures expanded bank credit facility at margin below 2%](https://longbridge.com/en/news/290883600.md) - [Coiled Therapeutics: AO-252 delivers promising clinical results and commercial potential as the only clinical-stage TACC3 inhibitor](https://longbridge.com/en/news/290784764.md)