- 2025,03,28
In the 2025 Government Work Report, "deep-sea technology" was mentioned for the first time, giving new connotations to the marine economy. China's marine economy is ushering in a new round of development opportunities. At the local level, as a major coastal economic province, Guangdong Province took the lead in releasing a draft for public consultation on February 28th of the "Regulations of Guangdong Province on Promoting High-Quality Development of the Marine Economy", providing new opportunities for marine-related enterprises to deepen their involvement in the marine economy.
The issuance of these series of policy documents signifies that the national marine economy is vigorously supporting the development of seven emerging industries, including marine pharmaceuticals and biological products. Recently, on March 20th, Shanghai announced the release of the "Shanghai Marine Industry Development Plan (2025-2035)", focusing on marine renewable energy, deep-sea new materials, marine biomedicine, and deep-sea aquaculture, among others, as the benefits from these sectors enter a period of intensive release. According to the "2024 China Marine Economy Statistical Bulletin" released by the Ministry of Natural Resources recently, the total output value of the national marine industry reached RMB 10.54 trillion in 2024, representing a year-on-year increase of 5.9%, and accounting for 7.8% of GDP. A trillion-yuan blue ocean market is accelerating its formation.
Exploring Medicines from the Sea: Building a Moat for the Entire Industry Chain
As the first listed company in Zhejiang Province to deeply engage in marine biomedicine, Chengyi Pharmaceutical (603811) may receive more policy support for its business operations amid the general trend of marine economic development.
It is understood that Chengyi Pharmaceutical's core product, glucosamine hydrochloride, is a typical example of a successfully developed marine drug. Its main raw material is chitosan derived from crab and shrimp shells, which offers unique advantages such as being purely natural and without additives compared to similar products. Leveraging the geographical advantages of the Wenzhou Dongtou National Marine Ranch Demonstration Zone and its industrial layout in the marine economy over the years, Chengyi Pharmaceutical is quietly building a moat in marine biomedicine. To this day, in terms of glucosamine products, the company has formed a fully integrated advantage from raw material extraction, active pharmaceutical ingredients (APIs) to formulation production.
On the market front, after its glucosamine products won the bid for national centralized procurement in 2020, the company swiftly captured 41% of the hospital market nationwide. Following the renewal of provincial centralized procurement in 2023, the company further drove market expansion efforts, maintaining high growth in revenue for its glucosamine products. In the first three quarters of 2024, the company's revenue from joint-related drugs reached RMB 346 million, representing a year-on-year increase of 36.27%, with a gross margin stably exceeding 70% for three consecutive years.
Breaking Through in the Deep Sea: High-Purity EPA Disrupts Import Monopoly
While consolidating its leading position in glucosamine, the company is also deeply advancing its layout along the marine health industry chain. In April 2024, the company obtained a production license for food-grade fish oil raw materials. Currently, it is actively promoting the approval of ultra-high purity fish oil EPA formulations and active pharmaceutical ingredients (APIs), aiming to establish a comprehensive health product matrix centered around the health management of middle-aged and elderly people.
It is understood that ultra-high purity fish oil EPA is a scarce drug for lowering blood lipids, and the main barrier in its industry chain lies in the low-cost, large-scale supply of APIs. The marine biomedicine manufacturing project invested and constructed by Chengyi Pharmaceutical has been completed. With the gradual release of 1,000 tons of ultra-high purity fish oil EPA production capacity, the company is expected to break through the import monopoly in the field of high-purity EPA in the future, occupying a significant advantageous position in the ultra-high purity fish oil EPA API segment.
The company's layout in the fish oil sector is not limited to APIs, but has extended to downstream formulations and health supplements. According to the investor exchange activity record sheet disclosed in November 2024, the company has successfully registered six domestically produced health foods and is actively promoting brand building and channel expansion to accelerate the development of its health industry.
Strengthening Through the Sea: The "Two Strong and One Large" Strategy Solidifies Its Position as the Premier Marine Biomedicine Stock
By strengthening the glucosamine and super fish oil industries and focusing on the health industry, the company's "Two Strong and One Large" strategy will resonate deeply with policy dividends. Upon completion, the 2,000-ton glucosamine API project will become the largest production base in Asia, and the 1,000-ton ultra-high purity fish oil EPA API project, along with the layout in the downstream formulation sector, will collectively establish Chengyi Pharmaceutical's full-category, full-chain product system ranging from APIs to formulations and health supplements. In terms of production capacity scale and product layout, this will propel Chengyi Pharmaceutical to solidify its position as a leading enterprise in marine biomedicine.
As policy emphasis on the marine economy and deep-sea technology continues to increase, Chengyi Pharmaceutical, as a company that has deeply cultivated marine biomedicine for many years, is also continuously promoting the integrated development of its business and technology.
Recently, the company pointed out on "e-Interaction" that as early as 2019, Chengyi Pharmaceutical had established a "provincial-level digital workshop," where AI algorithms were applied in intelligent warehousing and logistics to optimize logistics routes, achieving fully unmanned management from warehousing to outbound. Since 2025, the company has vigorously promoted the application of AI intelligent software such as DeepSeek, which has played a positive role in early-stage screening of drug research and development, market research, and other aspects. In the next step, Chengyi Pharmaceutical will continue to vigorously promote the use and application of AI intelligent software and hardware, accelerating the construction of smart factories and future factories. (CIS)
Source: Securities Times Website