7 consecutive limit-ups! JinYao Pharmaceutical has no ongoing innovative drugs in development but still experiences explosive trading?

For days on end, innovative drug concept stocks have repeatedly been active. According to Tonghuashun data, since March 24, innovative drug concept stocks have risen by more than 13%, and many individual stocks have hit the trading-session daily limit within the session.

Among them, Tianjin Pharmaceutical Group Co., Ltd.’s (Tianjin Jinyao Pharmaceutical Co., Ltd.) stock price fluctuations have drawn particular attention. Within 10 consecutive trading days (from March 24 to April 7), the cumulative deviation of the stock’s daily closing price gain reached 100%. From March 26 to April 7, the company’s stock hit the trading-session daily limit for seven consecutive trading days; during that period, the cumulative gain in the stock price was 93.69%. As of the close on April 7, the quoted price was 7.67 yuan per share, and the market capitalization was about 8.375 billion yuan.

On the evening of April 7, when publishing its announcement, Tianjin Jinyao Pharmaceutical emphasized that the company has noticed the market listing it as an innovative drug concept and conducting speculation. The company’s current R&D is mainly focused on generic drugs, with no innovative drug projects under development, and the related speculation has been clearly misread. The company’s main businesses include R&D, production, and sales of steroid hormone–type and amino acid–type APIs and preparations. At the same time, the company has noted the market’s discussion on the prices of hormone API products. Currently, the overall prices of the company’s steroid hormone API products remain stable, and do not affect the company’s operating performance.

Tianjin Jinyao Pharmaceutical also warned investors of risks in the announcement, saying that the company’s main business has not undergone major changes. The stock price has risen sharply and continuously in the short term; the stock turnover rate has continued to expand; and the price-to-earnings ratio (TTM) is significantly higher than the industry’s average level, with clear signs of irrational market speculation. The company has a small tradable float, so after the speculation, there is always the risk that the stock price could drop rapidly at any time.

**　　As innovative drug concept stocks soar**

Biopharmaceuticals have been clearly defined as an emerging pillar industry. Innovative drugs have been elevated to the level of a national strategy. China’s innovative-drug industry has moved on from extensive growth and entered a new stage of high-quality development. For pharmaceutical companies where R&D and innovation are at the core, new development opportunities have emerged.

According to information from the National Medical Products Administration, in the first three months of this year, the total value of external licensing transactions for China’s innovative drugs exceeded 60 billion USD, approaching half of the full year of 2025. As of March 27, China had approved 10 innovative drugs for 2026, including 2 imported and 8 domestic. China’s innovative drugs have achieved historic breakthroughs, maintaining good development momentum and potential.

In the view of industry insiders, whether it is the policy side continuing to ramp up innovation R&D and the review and approval process continuing to accelerate, or it is the industry side seeing a substantial increase in external licensing transactions, together with major pharmaceutical companies gradually disclosing annual report positives, these multiple factors jointly support the market logic for innovative drugs at present and work together to drive the industry toward positive development. Therefore, in the secondary market, innovative drug concept stocks have repeatedly been active.

Tianjin Jinyao Pharmaceutical has been included in the relevant concept stocks. However, the amount of innovative drug-related information publicly disclosed by it is not substantial. In September 2025, during an interaction with investors, Tianjin Jinyao Pharmaceutical stated that it established an innovative research institute in 2024, responsible for innovative drug design and discovery, R&D, and the work of importing and incubating projects. At present, projects in its innovative-drug pipeline are in the early exploratory research stage. In the future, the company will continuously improve the layout of its product pipeline and accelerate diversified and differentiated development.

In addition, the JYSW003 project is an innovative-drug project commissioned by Tianjin Jinyao Biotechnology (Tianjin) Co., Ltd. to the company’s innovative research institute. The indication is psoriasis. Early exploratory research results initially showed clear efficacy and excellent safety characteristics of the drug. Currently, it is being carried out normally in accordance with the contract terms.

However, whether it is the innovative research institute or JYSW003, there has been little in the way of latest updates. In recent days, Tianjin Jinyao Pharmaceutical has also reiterated multiple times that its current R&D is mainly focused on generic drugs, with no innovative drug projects under development, and that the related speculation has been clearly misread.

Some industry analysts pointed out that before the start of this round of price increase, Tianjin Jinyao Pharmaceutical’s total market capitalization was only just over 4 billion yuan, and the share of holdings held by institutions was only 0.78%. With a light “chip” structure, it became an ideal target for speculative trading by retail investors, and there was relatively little selling pressure.

From March 26 to April 7, Tianjin Jinyao Pharmaceutical’s stock hit the daily limit for seven consecutive trading days. Over the past three trading days, the company’s stock turnover rate was 1.36%, 8.59%, and 16.15%, respectively. “The trading turnover rate continues to expand, the ‘passing the drum’ effect is apparent, and irrational market speculation is obvious—trading risks are extremely high.” Tianjin Jinyao Pharmaceutical stated.

As of April 7, Tianjin Jinyao Pharmaceutical’s latest price-to-earnings ratio (TTM) was 513.94x. Based on the latest data from China Securities Index Co., Ltd., for the company’s industry classification “C27 Pharmaceutical Manufacturing,” the corresponding industry rolling P/E ratio is 29.26x. Tianjin Jinyao Pharmaceutical believes that the company’s relevant indicators have severely deviated from a reasonable valuation level for the industry, and that a bubble has begun to form.

**　　Pressure on performance**

As one of the earlier domestic enterprises to develop and produce steroid hormone APIs, Tianjin Jinyao Pharmaceutical mainly engages in R&D, production, and sales of steroid hormone–type and amino acid–type APIs and formulations. Its main products include more than 70 API varieties such as the dexamethasone series and prednisone series, as well as more than 10 dosage forms such as injections and ointments.

In the past two years, the company’s performance has faced some pressure. In 2024, the company achieved operating revenue of 3.215 billion yuan, down 15.00% year over year; attributable net profit to shareholders was 133 million yuan, up 14.01% year over year. In the first three quarters of 2025, operating revenue was 2.232 billion yuan, down 13.24% year over year; attributable net profit to shareholders was 69.5399 million yuan, down 62.75% year over year; and non-recurring attributable net profit was 136 million yuan, down 26.06% year over year.

Regarding the decline in profit in the first three quarters of 2025, Tianjin Jinyao Pharmaceutical said that, mainly, from the beginning of this year to the end of the reporting period, the company received an administrative penalty of 69.1924 million yuan due to antimonopoly matters. In addition, it was also affected by factors including centralized procurement, reduced use of terminal drugs, and continued intensification of competition in international markets, leading to a significant decline in the unit sales price of its products. As a result, both sales revenue and gross margin declined to some extent on a year-over-year basis.

Among them, the antimonopoly matter attracted broad market attention. On April 30, 2025, Tianjin Jinyao Pharmaceutical received the “Administrative Penalty Decision Letter” from the Tianjin Municipal Administration for Market Regulation. With the organization of relevant personnel, the company entered into an antimonopoly agreement with three competing counterparts to change and fix the prices of dexamethasone sodium phosphate API, thereby excluding and restricting competition in the sales field of dexamethasone sodium phosphate API; therefore, it was fined and had confiscated amounts totaling 69.1924 million yuan in total.

For centralized procurement, Tianjin Jinyao Pharmaceutical’s subsidiary Tianjin Heping selected its aminophylline injection, fluorouracil injection, and (both) metaraminol bitartrate injection and metaraminol noradrenaline injection for the tenth batch of the nationwide centralized volume-based procurement of drugs (the tenth batch). The prices of the relevant products declined to some extent. This batch of centralized procurement was rolled out and implemented nationwide in April 2025.

In addition, the company also received regulatory measures due to internal control issues. On January 27, 2026, Tianjin Jinyao Pharmaceutical received the “Decision on Administrative Regulatory Measures” issued by the Tianjin branch of the China Securities Regulatory Commission. After investigation, the company had the following problems: first, for certain outsourced technology projects, it used standardized contracts, and the provisions concerning the counterparty’s liability for breach of contract were not explicit enough, and the contract content was not compliant. Second, it failed to identify in a timely manner the termination risk of some R&D projects, resulting in delayed recovery of prepaid amounts. The Tianjin CSRC decided to take supervision and administration measures requiring the company to make corrections, and to take supervision and administration measures issuing warning letters to Xu Hua, Li Shuxiang, Wang Fujun, Zhang Jie, and Yang Fuqin.

At present, Tianjin Jinyao Pharmaceutical is rectifying the issues one by one to ensure that the rectifications are carried out properly and achieve real results.

For an enterprise, only by focusing deeply on its core business and solidifying the fundamental foundation of R&D and operations can it truly resist market fluctuations. This round of speculation will eventually come to an end, and what remains for the market is profound reflection on short-term games versus long-term investment.

（Source: 21st Century Business Herald）