CITIC Securities: Traditional Chinese Medicine OTC sector expected to experience "multiple resonance of fundamentals"

CITIC Securities' research report pointed out that the Chinese medicine OTC sector is expected to experience a "multiple resonance in fundamentals." The prices of core precious medicinal materials such as natural musk and processed gelatin have plummeted, relieving the downstream of the industry chain of cost burdens; the midstream destocking cycle is coming to an end, with the industry as a whole bidding farewell to the extensive expansion of "forcing goods to channels," and financial statements quality and operating cash flow exhibiting strong resilience and authenticity. With the premise of maintaining rigid terminal prices, cost savings will be transmitted to the profit and loss statement. We strategically recommend a bullish view on the Chinese medicine OTC sector. It is currently the best window period for profit repair in the left-layout sector, and we suggest strategic bottom positioning.