Listed companies in the traditional Chinese medicine industry seize opportunities to improve quality and pursue innovation.

Securities Daily reporter Wu Yixuan, trainee reporter Zhong Yurun

On July 1, four national standards in the field of traditional Chinese medicine (TCM) officially came into effect, proposed and supervised by the National Administration of Traditional Chinese Medicine, and approved and released by the State Administration for Market Regulation (National Standardization Administration): "Basic Theory Terminology of Traditional Chinese Medicine," "Diagnostic Vocabulary of Traditional Chinese Medicine Part 1: Tongue Manifestation," "Diagnostic Vocabulary of Traditional Chinese Medicine Part 2: Pulse Manifestation," and "Specifications for Quality Control of Clinical Research in Traditional Chinese Medicine."

"Currently, China's TCM industry is entering a critical window period for high-quality transformation and upgrading, and the implementation of the above national standards comes at the right time," said Sun Yuhao, senior partner of Shanghai Haihua Yongtai Law Firm, in an interview with a Securities Daily reporter. "The implementation of the standards helps unify TCM terminology, diagnostic descriptions, and clinical research norms, addressing pain points such as inconsistent industry expression and uneven research quality, and promoting the industry to transition from extensive expansion to a standardized, high-quality, modernized development path."

As a unique cultural treasure of China, the development of the TCM industry has received great attention from the state. A series of policy documents, including "Opinions on Improving the Quality of Traditional Chinese Medicine to Promote High-Quality Development of the TCM Industry," "Special Regulations on the Supervision and Management of TCM Production," and "Implementation Plan for High-Quality Development of the TCM Industry (2026-2030)," have been successively issued, providing top-level design for improving the quality of TCM and promoting high-quality development of the TCM industry.

Local governments are also actively responding. Taking Zhejiang Province as an example, in April this year, the "Zhejiang Province '15th Five-Year' TCM Development Plan" issued by the General Office of the People's Government of Zhejiang Province proposed that by 2030, significant achievements will be made in the new era's "TCM Climbing Project," with TCM service capabilities and levels ranking among the top in the country, TCM artificial intelligence application levels leading nationwide, comprehensively enhanced momentum for TCM inheritance, innovation, and development, widespread access to high-quality, efficient, and inclusive TCM health services for the public, a TCM modernization development index reaching 90, and basically building a leading province in TCM modernization.

The increasingly improved policy system provides a favorable environment for industrial development. From the perspective of TCM application and approval, the "2025 Drug Evaluation Report" shows that the National Medical Products Administration accepted 2,723 TCM registration applications in 2025, including 54 new drug marketing authorization applications, a year-on-year increase of 35%. At the same time, six TCM innovative drugs were approved for marketing in 2025, with the pace of R&D achievement transformation continuing to accelerate.

According to Frost & Sullivan data, benefiting from the continuous improvement in residents' health awareness and the deep penetration of digitalization and artificial intelligence technology in the TCM field, the market size is expected to steadily grow to 492.3 billion yuan by 2030, highlighting the industry's growth resilience.

Facing the continuous policy dividends and broad market prospects, listed TCM companies are seizing opportunities of the times and seizing the first-mover advantage in industrial development through diversified布局.

Specifically, many companies are actively improving their industrial chain layout, with leading companies particularly prominent in their actions. For example, Yunnan Baiyao Group Co., Ltd. has long adhered to a full-industry-chain development strategy. In 2025, the company successfully acquired Anguo Juyaotang Pharmaceutical Co., Ltd., aiming to improve the coordination efficiency of the TCM material industrial chain, drive provincial resource integration and national layout, and lay the foundation for the expansion of decoction piece sales and formula granule business.

Increasing efforts in new drug creation technology research is also a key direction for listed pharmaceutical companies. For example, Zhejiang Zuoli Pharmaceutical Co., Ltd. continues to promote the R&D of Wuling series innovative drugs and has initiated three TCM innovative drug projects in different therapeutic directions under the Wuling series. Among them, the Shenling Granules project has achieved expected results in all research data, has submitted an IND (Investigational New Drug) application, and received a drug clinical trial approval notice in April this year. Phase II clinical trials will be carried out as planned.

Despite the promising outlook, the development of the TCM industry has not been smooth sailing. Currently, problems such as intensified corporate differentiation, fluctuations in some raw material supplies, and uneven R&D transformation efficiency still objectively exist, constraining industrial upgrading to a certain extent.

In response, Yuan Shuai, deputy secretary-general of the Zhongguancun Internet of Things Industry Alliance, told a Securities Daily reporter that resolving the existing shortcomings in the industry requires coordinated efforts from multiple parties. At the government level, policies to support TCM materials and full-chain standard norms should be continuously improved; relevant companies can proactively build traceability systems to smooth raw material fluctuations while continuously increasing R&D investment; various industry platforms should establish industry-university-research cooperation channels to narrow the development gap between enterprises and jointly help the TCM industry achieve balanced quality improvement.