Qizheng Tibetan Medicine: Two Major Highlights Ignite Growth Enthusiasm

　　A Western medical doctor remarked: “The secrets of human health, long sought after, seem sealed away in a mysterious sanctuary—and Tibetan medicine is one of the paths that lead to its gateway.” This statement succinctly captures the current medical community’s view of Tibetan medicine. Consequently, Qizheng Tibetan Medicine, which is soon set to enter the capital market, has attracted considerable interest from investors.

　　Align with industry trends and chart a path for growth.

　　Drawing on millennia of wisdom, Tibetan medicine has become an exceptionally precious treasure within the treasure trove of traditional Chinese medicine—featuring uniquely pure Tibetan medicinal resources, a rigorous and comprehensive medical theoretical system, distinctive Tibetan herbal combinations and preparation techniques, and innovative disease-treatment approaches. These elements have endowed Tibetan medicine with remarkable therapeutic efficacy, making it truly a “genetic resource” of Eastern life wisdom. In southeastern Tibet, Linzhi has historically been known as the "Island of Medicines." It was here in 1995 that Qizheng embarked on its journey in the Tibetan medicine industry. Such profound historical roots continue to nurture Qizheng Tibetan Medicine’s abundant growth potential.

　　The development strategy that aligns with industry trends continues to fuel the growth of Qizheng Tibetan Medicine. On the one hand, this is because Qizheng Tibetan Medicine’s core products are primarily targeted at skeletal and muscular pain, a market segment with relatively optimistic prospects. According to relevant data, patients suffering from skeletal and muscular pain alone account for 18% of the country’s total population, meaning the patient base exceeds 200 million. Moreover, the number of people in China suffering from arthritis exceeds 100 million, with annual treatment costs surpassing 13.5 billion yuan—a market with enormous potential. On the other hand, Qizheng Tibetan Medicine’s product development strategy is remarkably clear-cut. Currently, the main dosage forms of topical analgesics include patches, ointments, liquid formulations, and aerosol sprays. According to statistics from the Southern Institute of Pharmaceutical Economics, the market size for topical analgesics grew from 3.349 billion yuan in 2005 to 4.374 billion yuan in 2007, representing an average annual compound growth rate of 14.28%. During the same period, the market size for topical analgesic patches rose from 1.395 billion yuan to 1.924 billion yuan, with an average annual compound growth rate of 17.44%. The share of topical analgesic patches in the overall topical analgesic market also steadily increased from 41.66% to 43.98%. Clearly, patch-type analgesics have become the dominant dosage form in the topical analgesic market—and these happen to be Qizheng Tibetan Medicine’s flagship products, providing an exceptionally favorable industry backdrop for its continued development.

　　Moreover, the sales channels for topical pain-relief patches are concentrated in the retail and hospital markets. In 2008, the sales volume of topical pain-relief patches in China’s hospital market was approximately 551 million yuan, representing an increase of over 45.51% compared to the same period last year. The retail market accounted for sales of 2.127 billion yuan, capturing a 79.41% share of the overall topical pain-relief patch market and maintaining a rapid growth momentum. In 2008, the total market size for topical pain-relief patches in China reached 2.678 billion yuan, accounting for 53.65% of the entire topical pain-relief drug market. This represented a 25.95% increase over the previous year, outpacing the 14.13% growth rate of the broader topical pain-relief drug category. Qizheng Tibetan Medicine products have maintained a relatively solid leading position in the hospital market, with a market share reaching 22.01%. This indicates that the company has significantly outpaced its major competitors in developing the hospital market and has secured a first-mover advantage.

　　Two major highlights ignite the passion for growth.

　　Moreover, Qizheng Tibetan Medicine’s unique competitive advantage is sustainable because its past success has not only stemmed from the company’s development strategy aligning with industry trends but also from the fact that the company has found the “golden key” to unlocking the treasure of Tibetan medicine—namely, the harmonious blend of inheritance and innovation. Inheritance refers to the preservation of Tibetan medicine’s distinctive medicinal resources, its rigorous and comprehensive medical theoretical system, its unique herbal combinations and preparation techniques, and its specialized approaches to disease treatment. Innovation encompasses both the corporate development strategy mentioned earlier, which is aligned with industry trends, as well as R&D strategies, product strategies, marketing strategies, branding strategies, and strategies for sourcing raw materials—all of which represent the very “genetic code” that will enable Tibetan medicine to achieve nationwide recognition. The continued cultivation of these “genetic codes” will forge a path of sustainable growth for Qizheng Tibetan Medicine.

　　Meanwhile, Qizheng Tibetan Medicine currently has two major investment highlights.

　　First, we’ve adopted a marketing strategy that precisely aligns with the industry’s development trends. Currently, sales channels for topical pain-relief patches are concentrated in retail and hospital markets; however, the “third-tier” distribution channel has emerged as a new hotspot fiercely contested by major manufacturers. Building on our ongoing efforts to expand both hospital and retail markets, the company is now “actively responding to national healthcare reform policies and intensifying our efforts to develop the ‘third-tier market.’” This suggests that the third-tier market is highly likely to become a new source of growth for our products. In addition, the company will further strengthen basic and clinical research to enhance the professionalism of our “academic promotion model.” Moreover, while consolidating our strong position in the hospital market, we’re also extending our reach downward into community healthcare settings. These factors are expected to reinforce our existing products’ leading market position and ensure their continued growth prospects.

　　Second, the company boasts a rich portfolio of reserve products. The company will focus on the pain-relief drug market, establishing a new R&D platform for innovative dosage forms and product types, and redeveloping its core products around their existing strengths. It will also concentrate on TCM’s areas of competitive advantage—such as the digestive system, cardiovascular and cerebrovascular systems, gynecology, and the nervous system—and strive within three years to cultivate a series of topical pain-relief products and launch Tibetan medicine products with differentiated therapeutic advantages into new therapeutic areas. Currently, Qizheng Tibetan Medicine has a clear pipeline of follow-up products and possesses a relatively comprehensive product portfolio in the Tibetan medicine field. Leveraging the company’s existing sales network and strategic development approach, these products are poised to quickly become new profit growth drivers, thereby fully unlocking the abundant growth potential inherent in the company’s “genetic makeup.”