Supply and demand risk of Chinese medicine industry in 2013

First, the market supply and demand risk

The market is constantly changing, and the supply and demand of the market are constantly changing, and changes in the relationship between supply and demand will inevitably cause fluctuations in the prices of the products of the machinery industry. Such changes will cause the actual returns of the industry investment to deviate from the expected returns. The more serious situation is that when the structural overcapacity in the market reaches a certain degree, investors will face a serious situation with a large backlog of products, resulting in serious capital pressure and increased pressure on loan repayment, which can easily lead to the bankruptcy of investors. It will also increase the number of bank bad loans and bad debts.

In 2013, the TCM manufacturing industry faced less risk of supply and demand, strong domestic market demand, and the recovery of external demand. The supply and demand risks that the industry may encounter come mainly from the increase in trade friction, which has caused external demand to be affected to some extent. At present, China's pharmaceutical market is dominated by the prescription drug market. The main products of Chinese medicine companies have small toxic and side effects, and are mostly non-prescription drugs. The immature market for non-prescription drugs has limited their market capacity. As a result, the increased sales of traditional Chinese medicine companies will increase the production of their products. Market test of the demand for this product.

In terms of exports, Chinese medicine products pose risks due to differences in quality standards and exchange rate fluctuations. Due to the different standards of China and the target countries for the export of Chinese medicines in terms of heavy metals and pesticide residues, this may be limited in the export of products. The control of sales of pharmaceutical products in developed countries is very strict, and the exported drugs must meet the quality standards of importing countries. Otherwise, the export of products of enterprises will be subject to certain restrictions. If the exchange rate fluctuates, it will also increase the business risks of the company.

Second, the raw material price risk

The risk of raw materials mainly comes from the risk caused by changes in raw material prices. Changes in the prices of raw materials will affect the production costs of downstream companies, which will in turn affect the profitability of downstream industries to some extent.

The main raw material for the Chinese medicine manufacturing industry is Chinese herbal medicines. Due to the obvious geographical distribution of the origin of medicinal materials, and for natural growth and season collection, a certain medicinal material may cause shortage of supply or price increase due to natural disasters and other reasons in a certain period, which constitutes the risk of raw material supply, which will directly Affects the company's policies on production, operation and profitability. In addition, the sources of Chinese medicine companies mainly come from medicine and peasants, important markets and enterprise production bases. Due to the spontaneous adjustment of market supply and demand, there is a clear periodicity in the supply of raw materials. If there are problems in production and acquisition, they will be able to affect the sales of Chinese medicine companies. Amount and operating efficiency.

Third, product risk

Product risk refers to the state of the product in the market when it is not sold right. Product risks include product design risks, product function quality risks, product selection timing risks and product market positioning risks, product brand trademark risks and so on. Product design risk means that the products designed by the enterprise are outdated or too advanced and do not meet the needs of the market customers; the product quality and quality risks mainly refer to the products sold by the enterprise, and the functional quality is insufficient or the function quality of the products is excessive, which cannot fully meet the needs of users; The risk of product timing when entering the market refers to the improper selection of the time the product enters the market; the risk of product market positioning means that the characteristics of the product do not match the requirements of the market customer; the risk of the product brand trademark refers to the infringement or improper maintenance of the brand-name product, making the brand name The state of damage to the product's reputation.

At present, the product risks that China's TCM manufacturing industry faces are mainly from product design risk and product function quality risk. China's TCM manufacturing industry is still in a state of low-end products, and its product quality is relatively small in the international market. The current industry development has met with major difficulties, both as a result of the severe impact of the international financial crisis, but also reflecting the irrational product structure and the lag in the transformation of the development mode. Intensifying research and development of high-end products and developing high value-added products are the industry trends in the future. The corresponding backward technologies and products will be limited or eliminated. However, due to the high-tech, high-risk, and high-value-added features of pharmaceutical products, the cycle of product development, clinical trial approval, and production is relatively long, and approvals and expert appraisal reports from relevant management departments must be obtained at all stages. Large investment and high requirements for personnel quality will all be affected by some unpredictable factors.