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

Caixin News, March 30 (Reporter He Fan). Benefiting from rising prices for lab animals, “Hou Mao” Zhaoyan New Drug (603127.SH) saw its net profit last year increase by more than threefold year over year. However, due to factors including intense industry competition earlier on, the company recorded a net loss of RMB 164 million in its laboratory services and other businesses last year.

This evening, Zhaoyan New Drug issued an announcement stating that in 2025, the company achieved operating revenue of RMB 1.658 billion, down 17.87% year over year. Net profit attributable to shareholders of listed companies was RMB 298 million, up 302.08% year over year. In addition, the company’s overall outstanding order book is about RMB 2.6 billion, while the amount of newly signed orders is also about RMB 2.6 billion, both showing year-over-year growth.

However, it is worth noting that the growth in Zhaoyan New Drug’s net profit is not driven by core businesses such as drug safety evaluation or pharmacology and 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 gross margin from its main business was 20.71%, down 7.72 percentage points from the previous year. Of this, due to the lagging effects of earlier intense industry competition, the drug nonclinical research services achieved operating revenue of RMB 1.577 billion, down 17.75% year over year. The gross margin was 21.01%, down 8.18 percentage points from the previous year. Clinical services generated revenue of RMB 72.8334 million, with a gross margin of 22.16%, up 8.17 percentage points from the same period last year, mainly because this business is still in its development stage, with a small scale and unstable margins. Meanwhile, affected by insufficient capacity utilization because rodent experimental model capacity is still at the start stage, revenue from the supply of experimental models was RMB 7.7508 million, with a loss of RMB 4.191 million.

During the reporting period, the company’s net gains from changes in the fair value of biological assets were RMB 476 million. Zhaoyan New Drug’s biological assets are mainly nonhuman primate experimental models used for evaluation of nonclinical projects—so-called “lab macaques.”

Caixin News reporters learned through the China Government Procurement website that this month, 450 crab-eating macaques were awarded at a total bid price of RMB 58.95 million, equivalent to RMB 131,000 per unit. Compared with the price of RMB 80,000 per unit at the beginning of 2025, this represents a significant increase.

Despite the sharp year-over-year increase in net profit, a series of share reduction activities by Zhaoyan New Drug in the secondary market has drawn widespread criticism. On the 15th of this month, the company announced that the fourth-largest shareholder and the seventh-largest shareholder reduced their holdings in a “clear-out” style by 30.74 million shares, accounting for 4.1026% of the company’s total share capital. The next day, Zhaoyan New Drug’s A-shares hit the daily limit down, while its H-shares fell 11.7%. The company then urgently corrected its share reduction plan, changing it to a reduction of 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 by 14.979 million shares through block trades and centralized bidding, raising about RMB 568 million. As of today’s close, Zhaoyan New Drug’s share price has fallen by nearly 30% from its high earlier this year.

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

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