Monkey makes a contribution! Zhaoyan New Drug Biological assets' market value fluctuations bring nearly 500 million yuan in net gains | Financial report analysis

Is “AI” asking: Does declining performance under Zhaoyan Pharmaceutical’s core business reflect intensifying industry competition?

Caixin Media, March 30 (Reporter He Fan) Benefiting from rising prices of lab monkeys, Zhaoyan Pharmaceutical (“Monkey Mao”) (603127.SH) saw its net profit grow by more than three times year-on-year last year. However, due to factors including fierce industry competition in the earlier period, the company recorded net losses of RMB 164 million in laboratory services and other businesses last year.

In the evening today, Zhaoyan Pharmaceutical released an announcement. In 2025, the company achieved operating revenue of RMB 1.658 billion, down 17.87% year-on-year; net profit attributable to shareholders of listed companies was RMB 298 million, up 302.08% year-on-year. In addition, the company’s overall outstanding order book is about RMB 2.6 billion, and the amount of newly signed orders is also about RMB 2.6 billion, both increasing year-on-year.

But it is worth noting that Zhaoyan Pharmaceutical’s growth in net profit is not driven by core businesses such as drug safety evaluation or pharmacodynamics research. Instead, it mainly comes from gains resulting from changes in the fair value of biological assets.

According to the announcement, last year the company’s main business gross margin was 20.71%, down 7.72 percentage points from the previous year. Of this, due to the delayed impact of fierce industry competition in the earlier period, revenue from pharmaceutical non-clinical research services was RMB 1.577 billion, down 17.75% year-on-year; gross margin was 21.01%, down 8.18 percentage points from the previous year. Clinical services revenue was RMB 72.8334 million, with gross margin of 22.16%, up 8.17 percentage points from the same period last year, mainly because this business is still in a development stage, with a small scale and unstable gross margins. Meanwhile, due to insufficient capacity utilization affecting the supply of laboratory models for rodent experimental models that are still in the initial stage, revenue from the supply of experimental models was RMB 7.7508 million, with a loss of RMB 4.1910 million.

During the reporting period, the company generated net gains of RMB 476 million from changes in the fair value of biological assets. Zhaoyan Pharmaceutical’s biological assets are mainly non-human primate experimental models used for the evaluation of non-clinical projects—so-called “lab monkeys.”

Caixin Media reporter learned from a search of China’s government procurement website that, just this month, 450 crab-eating monkeys won bids at a price of RMB 58.95 million, or RMB 131,000 per animal. Compared with the price of RMB 80,000 per animal at the beginning of 2025, this represents a notable increase.

Despite the sharp increase in net profit last year, Zhaoyan Pharmaceutical’s series of share reduction actions in the secondary market has drawn criticism. On the 15th of this month, the company announced that its fourth-largest shareholder and seventh-largest shareholder carried out clearance-style selling of 30.74 million shares, accounting for 4.1026% of the company’s total share capital. The next day, Zhaoyan Pharmaceutical’s A-shares hit the daily limit down, and its H-shares fell 11.7%. The company then urgently revised its share reduction plan, changing it to selling no more than 3% of the total share capital. In fact, as early as January this year, the company’s controlling shareholder Zhou Zhiwen had already reduced holdings of 14.979 million shares through block trades and centralized bidding, raising approximately RMB 568 million in proceeds. By today’s close, Zhaoyan Pharmaceutical’s stock price has fallen by nearly 30% compared with its high point at the beginning of this year.

Similarly, as a CRO company, Kanglong Chemical (300759.SZ) achieved operating revenue of RMB 14.095 billion in 2025, up 14.82%. Of this, revenue from its laboratory services business was RMB 8.159 billion, up 15.78%. HLB—Kailaiying (002821.SZ) achieved operating revenue of RMB 6.670 billion in 2025, up 14.91%. Among them, its main business segment, small-molecule CDMO solution, contributed revenue of RMB 4.735 billion, up 3.59%.

(Caixin Media reporter He Fan)