According to recent reports from CCTV from the National Administration of Traditional Chinese Medicine, through a series of measures such as accelerating the construction of advantageous Traditional Chinese Medicine specialties, the high-quality development of county-level Traditional Chinese Medicine hospitals, and the construction of collaborative hospitals between Traditional Chinese and Western Medicine, China has established 1,158 national Traditional Chinese Medicine advantageous specialties. The next step will be to build a network of advantageous Traditional Chinese Medicine specialties, creating clusters in this field, with a focus on strengthening the development of pediatrics, geriatrics, and psychiatry specialties, advancing the foundation and quality of county-level Traditional Chinese Medicine hospitals, and enhancing the service capacity of grassroots Traditional Chinese Medicine services.

Driven by both policy and clinical demand, the Traditional Chinese Medicine diagnosis and treatment industry has entered a phase of accelerated development in recent years. According to a Frost & Sullivan report, as health management needs continue to expand and policies encourage growth, the market size for Traditional Chinese Medicine diagnosis and treatment services in China is expected to reach 1.8 trillion yuan by 2030, with a CAGR of 18.18% from 2020 to 2030, significantly higher than the compound growth rate of the Traditional Chinese Medicine health market.

The underlying reason is that the aging population has rapidly increased the demand for Traditional Chinese Medicine diagnosis and treatment. According to data from the National Bureau of Statistics, the proportion of elderly people aged 65 and older in China has risen from 3.97% in 1960 to 14.27% in 2023. The growth of the "silver-haired" population has driven the rapid development of the silver economy. According to the "Blue Book on the Silver Economy: Report on the Development of China’s Silver Economy (2024)," the current scale of China’s silver economy is about 7 trillion yuan, accounting for around 6% of GDP. By 2035, the silver economy is expected to reach a scale of 30 trillion yuan, accounting for about 10% of GDP.

On the other hand, the awakening of residents' health awareness has led more and more consumers to value health management, taking proactive actions regarding previously neglected sub-health conditions. Traditional Chinese Medicine has a natural advantage in "preventing disease before it occurs," making it a choice for many residents to regulate their bodies and live healthily. The rapid development of industries related to Traditional Chinese Medicine consumption and Traditional Chinese Medicine diagnosis and health maintenance, which exhibit dual attributes of medicine and consumption, has driven the increase in income and profits for related enterprises.

Benefiting from improved market conditions, Hong Kong-listed Traditional Chinese Medicine diagnosis and treatment company Guoshengtang (02273) has seen rapid performance growth. The company voluntarily announced its Company Business Data for the first three quarters of 2024, stating that in Q3 2024, the number of patient visits reached 1.485 million, an approximately 25.0% increase from 1.188 million visits in Q3 2023. Additionally, according to the company’s mid-2024 report, the average patient spending has gradually increased, reaching 573 yuan per person by mid-2024.

Xiangcai Securities recently released a Research Report expressing optimism about the recovery of consumer-oriented Traditional Chinese Medicine sales driven by macroeconomic recovery and internal demand stimulation. The aging population and the increase in residents' health awareness provide the greatest long-term driving forces for consumer-oriented Traditional Chinese Medicine. The Traditional Chinese Medicine industry, with its long Industry Chain and characteristics of "prevention, treatment, and care," is expected to be more fully realized.