Chose the wrong concept? After five consecutive limit-ups, the star stock in "innovative medicine" JinYao Pharmaceutical claims to be the main research on generic drugs

On April 2nd, the innovative drug sector surged with limit-up gains, with JinYao Pharmaceutical hitting five consecutive limit-ups in five days, and concept stocks like Yibai Pharmaceutical, Peking University Medical, and Shuanglu Pharmaceutical also hitting the daily limit. Multiple concept stocks such as Kangzhi Pharmaceutical, Sansheng Guojian, and Northland Pharma led the gains with increases over 10%.

However, after the market closed on April 2nd, JinYao Pharmaceutical, the leading stock in this round of “innovative drug” rally, issued a risk warning announcement regarding stock trading, stating that the market has listed the company as an innovative drug concept. Currently, the company’s research and development mainly focus on generic drugs, with no ongoing innovative drug projects. The company’s main business involves the research, production, and sales of steroid hormones, amino acid raw materials, and formulations.

Following the announcement, market attention was triggered, with some netizens worried about Tianjin Pharmaceutical’s market performance.

According to Tonghuashun iFind, the reason JinYao Pharmaceutical was added to the “innovative drug” concept is related to a reply the company gave on an interactive platform earlier. On September 5, 2025, JinYao Pharmaceutical responded to an investor question about the progress of innovative drug R&D, stating: “JYSW003 project is an innovative drug project commissioned by JinYao Biotechnology (Tianjin) Co., Ltd. to the company’s innovation research institute. The indication is psoriasis. Preliminary exploratory research results show significant efficacy and good safety features. Currently, the project is proceeding normally according to the contract. Additionally, the company established an innovation research institute in 2024, responsible for innovative drug design, discovery, R&D, and incubation work. The current innovative drug pipeline projects are in early exploratory research stages.”

It is noteworthy that, apart from the main R&D project diverging from the innovative drug concept, JinYao Pharmaceutical’s current stock price increase also significantly diverges from its fundamental business performance. Public data shows that JinYao Pharmaceutical achieved an operating income of 2.23B yuan in the first three quarters of 2025, a year-on-year decrease of 13.24%. The net profit attributable to shareholders was 69.54 million yuan, down 62.75% year-on-year, and the net profit excluding non-recurring gains and losses was 136 million yuan, down 26.06% year-on-year. JinYao Pharmaceutical reminds investors that market sentiment may be overheated and subject to irrational speculation. The company’s fundamentals have not changed significantly, and there is a risk of rapid decline at any time.

(Disclaimer: The content of this article is for reference only and does not constitute investment advice. Investors operate at their own risk.)