Summary Analysis of The Current Situation of China's Chemical Raw Material Drug Market in 2021

Chemical raw materials refer to the raw materials used in the production of various preparations. They are the effective ingredients in chemical preparations. Various powders, crystals, extracts, etc., prepared by chemical synthesis, plant extraction or biotechnology, are used as medicines. , But a substance that the patient cannot take directly. Chemical raw materials can be further subdivided into three categories: bulk raw materials, specialty raw materials and patented raw materials.

1. Output
The impact of environmental protection policies on chemical pharmaceutical companies is comparable to that of chemical companies. In 2018, China began to levy environmental protection taxes, and the process of clearing low-end production capacity of raw materials accelerated. Affected by this, the output of China's APIs fell off a cliff in 2018, and China's output of APIs again shrank in 2019. The annual output of my country's APIs dropped from 3.478 million tons in 2017 to 2.622 million tons in 2019, 1-9 in 2021. The monthly output of my country's raw materials reached 2.24 million tons.

2. Operating income
Affected by the sharp decline in the output of raw materials, the price of raw materials has increased significantly, raising the production costs of downstream chemical pharmaceutical companies. Therefore, preparation companies have successively formed the upstream and downstream docking of the pharmaceutical industry industrial chain through self-built API production lines or mergers and acquisitions of API manufacturing enterprises, thereby reducing the costs incurred in the process of industrial chain circulation. According to data from the China Chemical and Pharmaceutical Industry Association, in 2020, companies that mainly produce raw materials will have an operating income of 394.46 billion yuan, a year-on-year increase of 3.70%. China Commercial Industry Research Institute predicts that in 2022, the operating income of my country's API industry will reach 447.9 billion yuan.

3. Export scale
The raw materials produced in China not only occupy an important position in the country, but also play an important role in the global pharmaceutical industry chain. my country is a big exporter of APIs. Except for a slight decline of 1%-2% in 2015 and 2016, the export scale of my country's chemical APIs has continued to grow over the years. It has increased from 15.98 billion US dollars in 2010 to a small decline in 2020. 35.7 billion U.S. dollars, more than doubled in 10 years.

According to preliminary statistics from the China Medical Insurance Chamber of Commerce, in the first half of 2021, my country’s export volume of APIs reached US$19.5 billion, an increase of 14% year-on-year, but this was mainly driven by an 18% increase in average export prices. In terms of volume, exports decreased by 4% year-on-year. %. This is mainly due to the unilateral increase in global bulk raw material prices and cross-border logistics costs since the second half of 2020, which is an increase in revenue but not profit, which also reflects a certain degree of decline in global demand for raw materials.

Four, enterprise analysis

1. Number of companies
At present, the world's main API production areas are China, India, Japan, North America and Western Europe, among which China and India have become the main API production and export countries. According to the "Annual Report on Statistics of Drug Supervision and Administration" issued by the National Medical Products Administration as of the end of June 2021, there are 7234 "Drug Production Licenses" (including Chinese medicine decoction pieces, medical gases, etc.) within the validity period, among which API and preparation manufacturers 4462 and 215 special drug production enterprises.

2. Regional analysis
As of the end of 2020, there were 1,642 chemical raw material drug manufacturers in my country. Among them, Jiangsu Province had the largest number of raw material drug manufacturers, with a total of 235, accounting for 14.3% of the country's total; followed by Hubei, Shandong, Sichuan, Hebei and Guangdong, respectively. There are 171, 145, 104, 84, and 80 companies. The above-mentioned 6 provinces have a total of 819 API manufacturers, accounting for half of the country’s chemical API manufacturers.

3. Analysis of listed companies
As of November 2021, there are 35 listed companies in my country's chemical raw material drug industry, with total revenue of 51.117 billion yuan in the first half of 2021. The top ten companies are Xinhecheng, ST Guanfu, Hisun Pharmaceutical, Zhejiang Pharmaceutical, Puluo Pharmaceutical, Xinhua Pharmaceutical, Haipurui, and Guobang Pharmaceutical. The top ten companies have total revenue in the first half of 2021. Reached 40.174 billion yuan, accounting for 78.5% of all 35 listed companies.