CASC Securities: China's health care products industry is continuously regulated and developed, with significant growth potential in the future.

China Aviation Securities released a research report stating that the health product industry in China is continuously regulated and still has significant development potential. At the same time, overseas brands are also entering the market, leading to faster market growth. With the rapid increase in the number of health product categories, the industry is growing quickly. China is currently in the period of industry outbreak. The penetration rate of health products among various age groups in China is lower than in the United States, and the market maturity is also lower. The future growth potential is significant compared to the United States. The main points of China Aviation Securities are as follows: The health product industry in China is continuously regulated. The development of health food in China began in the 1980s, gradually forming a regulatory system covering raw materials, functions, registration, production, and promotion, and entering a period of scientific and standardized development. It can be roughly divided into four stages. The first stage is the initial outbreak period of the industry. The market experienced wild growth but also mixed authenticity and fake products, urgently needing regulation. The second stage is after regulation, where the industry initially showed signs of contraction in size, then gradually grew, mainly due to the growth of traditional functional health products. The third stage is as the system continues to improve, the health product industry has a safer development space. Meanwhile, overseas brands are also entering the market, leading to faster market growth. The fourth stage is the high-growth period. The number of health product categories increases, and the industry grows rapidly. The health product market in the United States has gone through four stages and has become mature and stable. The health product industry in China still has significant development potential. The development of the health product market in the United States can be roughly divided into four stages: The first stage is when the FDA no longer classifies vitamins and other health products as drugs, and the industry sees its first growth peak. The second stage is after a period of high growth, the growth stabilizes. The third stage is the outbreak period of the industry, where the FDA changes its approval system to a filing system, leading to explosive market growth. The fourth stage is when the market enters a mature stage, with various products saturating the market and the market size stabilizing. Comparing China's health product market development stages to that of the United States, China is currently in the industry outbreak period. Various factors contribute to the high growth rate of the domestic health product market, although there is still a gap compared to the mature market in the United States. The penetration rate of health products among various age groups in China is lower than in the United States, and the market maturity is also lower. The future growth potential is significant compared to the United States.