In the gift recovery market, the prices of An Gong Niu Huang Wan and Pian Zi Huang, which have remained strong, have begun to fall in the second half of this year.

A recycling merchant from Chengdu informed reporters from Caixin, "This year's market conditions are poor. The price of Pian Zi Huang has dropped nearly 100 yuan per pill within a year." A recycling merchant in Beijing also noted, "Before June of this year, the price of new An Gong Niu Huang Wan was around 600-650 yuan per pill, but it has dropped significantly in recent months."

Interviews with various recycling merchants revealed that since June, second-hand market prices have noticeably decreased. Currently, the price of new Pian Zi Huang is around 550 yuan per pill, while An Gong Niu Huang Wan (Tong Ren Tang's dual-natural version) is priced between 450 and 500 yuan per pill. Expired or near-expiry medications have even lower recovery prices, with the recovery price for near-expiry Pian Zi Huang dropping to 400 yuan per pill.

Recycling merchants believe that the decline in prices for An Gong Niu Huang Wan and Pian Zi Huang is mainly related to economic conditions. This year, various pharmaceutical industry conferences have reported that drugstores are feeling unprecedented operational pressure compared to previous years.

Currently, the official price for Pian Zi Huang is set at 760 yuan per pill, and the retail price for Tong Ren Tang's An Gong Niu Huang Wan in a metal box is 860 yuan each. A reporter for Caixin visited multiple physical pharmacies and experiential stores in Zhengzhou and Shijiazhuang, where they found that offline prices matched the official pricing. However, some online pharmacies have begun pricing their products below the official rates. While mainstream online pharmacies like Alibaba and JD.com have kept their pricing stable, some smaller online pharmacies have offered Pian Zi Huang and An Gong Niu Huang Wan (Tong Ren Tang's metal box version) at prices significantly lower than the official rates.

In the past few years, the robust prices in the second-hand recovery market for Pian Zi Huang and An Gong Niu Huang Wan were also linked to continual increases in official pricing. Moreover, the ongoing rise in the price of natural cattle bile has been a significant contributing factor to the increasing prices of these two products.

Pian Zi Huang (600436.SH) has been particularly aggressive in its pricing strategy. Between 2004 and 2020, the prices for Pian Zi Huang pills were raised multiple times domestically, with retail prices soaring from 325 yuan to 590 yuan. Before mid-2021, the second-hand market prices were significantly higher than the official retail prices, but as the product re-embraced its pharmaceutical properties, sales of the company's core products began to slow, leading to a gradual decline in second-hand market prices below the official rates.

However, with the rising price of cattle bile, retail prices for Pian Zi Huang increased again in 2023 from 590 yuan to 760 yuan per pill, marking an increase of 28.8%, the highest in history. Nevertheless, the company's net profit growth in 2023 was only 13.15%, far below the extent of the price hikes, suggesting a downturn in product sales.

An Gong Niu Huang Wan has seen a similar trend. Over the past fifteen years, Tong Ren Tang (600085.SH) has increased the prices of its An Gong Niu Huang Wan three times. The price rose from 350 yuan in 2010 to 560 yuan in 2012 (an increase of about 60%). By early 2020, it went up again to 780 yuan (a 40% increase), and in December 2021, it was raised another 10% to 860 yuan.

However, the price hike in 2021 did not lead to increased market sales. Post-2021, the sales of Tong Ren Tang's cow bile heart-clearing pills and An Gong Niu Huang Wan began to decline. In 2022, sales of the company's top five products in the cardiovascular category reached 25.588 million boxes, a year-on-year decrease of 3.11% (including the Da Huo Luo series). In 2023, sales dropped further to 16.8471 million boxes, a year-on-year decrease of 0.94% (only for An Gong and Qing Xin series products). The evident decline in both price and sales might explain why, despite cattle bile prices rising over four times since 2021, the official price of An Gong Niu Huang Wan has remained stable in China.

This year, the price of natural cattle bile has also stabilized after two years of sharp increases. A reporter from Caixin learned from merchants in Anguo that "the current price for natural cattle bile of grade 55 is 1.65 million yuan per kilogram, remaining stable and consistent with initial prices of the year." Industry insiders believe that the tight supply-demand situation in the cattle bile market may begin to ease this year. On one hand, Shangyaojuyuan has started mass-producing internally cultivated cattle bile; on the other hand, China has begun pilots to relax the import restrictions on natural cattle bile, which will help mitigate the tight supply situation.

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