"Monkey Mao" shareholder reduction sparks emotional reactions; a threefold profit reversal should not be overlooked

AI Inquiry · How Can Zhaoyan New Drug Demonstrate Its Long-Term Competitiveness Behind Shareholder Reductions?

What truly determines a company’s fate is never just one or two sell-offs, but its ability to withstand cycles and its underlying competitive strength.

Produced by | Business Era

Edited by | Li Xiaoyan

Recently, Zhaoyan New Drug, known as “Monkey Mao,” has been in the spotlight—an announcement of a “clearance-style” reduction in holdings triggered intense capital battles, with A-share and H-share prices both under pressure. The market sentiment was rapidly amplified on March 17. However, as the noise subsides, rational investment logic is re-emerging: Is this a sign of a fundamental shift, or a capital move that has been misunderstood?

Looking at the longer-term perspective, this round of share reduction appears more like a routine action within an investment cycle. Gu Xiaolei and Gu Meifang, early shareholders before the IPO, have held their shares for over eight years. At the time of the 2017 IPO, Gu Xiaolei and Gu Meifang held 8.80% and 6.03%, respectively, ranking third and fourth among shareholders; before this reduction, their holdings had decreased to 2.7251% and 1.3775%. In other words, over the past eight years, their cumulative reduction exceeded 10 percentage points. This “full clearance” is more like the tail end of a long-term exit curve rather than a sudden retreat.

Meanwhile, the stability of control has not been compromised. Zhou Zhiwen’s reduction ratio was only 1.99894%, mainly through block trades, with limited impact on the secondary market; after the reduction, he and Feng Yuxia still maintain absolute control. The company quickly adjusted its plan, reducing the original 4.1026% reduction target to 3%, and introduced block trading channels to disperse selling pressure. From transaction structure to equity structure, these data points collectively indicate that while supply has temporarily increased, it has not touched the “core variables” of corporate governance and control.

Contrasting with the market sentiment are signals of a turning point in the company’s fundamentals. According to earnings forecasts, Zhaoyan New Drug is expected to achieve a net profit attributable to parent of 233 million to 349 million yuan in 2025, a substantial year-on-year increase of 214% to 371%. The net profit excluding non-recurring gains is even higher, at 945.2% to 1467.7%.

The core contribution to profit comes from biological assets. Data shows that the fair value change of biological assets will contribute about 452 million to 499 million yuan in net profit in 2025. The key driver for revaluation of biological assets is the rebound in experimental monkey prices. As a critical component for preclinical safety evaluations, the supply expansion cycle for experimental monkeys lasts 3-5 years, with demand closely tied to the pace of innovative drug R&D. Since 2025, with the global improvement in financing for innovative drugs, preclinical research demand has rebounded significantly, tightening supply and demand. Market data indicates that by the end of 2025, the price of crab-eating monkeys had risen back to 120,000–130,000 yuan per head, a clear rebound from previous lows, with some institutions already locking in capacity for the first half of 2026.

Zhaoyan New Drug’s resilience in this cycle stems from its large-scale resource reserves. By the end of 2025, the company’s stock of experimental monkeys exceeded 50,000, including over 3,000 gene-edited monkeys, making it one of the largest domestically owned monkey populations among CROs. It also has an export quota of about 3,000 monkeys per year, accounting for roughly 15% of the national total. These figures mean the company can not only absorb demand fluctuations internally but also directly convert resources into external revenue. In periods of tight supply and demand, this “resource as asset” attribute will significantly amplify profit elasticity.

Further dissecting the company’s long-term competitiveness reveals that its advantages are not based on a single breakthrough but are a multi-dimensional superposition. First, in terms of compliance, the company holds five major GLP certifications: China NMPA, US FDA, EU OECD, Japan PMDA, and Korea MFDS, along with AAALAC animal welfare certification. This makes it one of the few domestic institutions with a “global pass.” Building a GLP system typically takes 2-3 years and requires ongoing audits, creating a barrier that is difficult for newcomers to replicate in the short term.

Second, in project experience, the company has completed over 2,300 drug safety evaluation projects, including more than 1,300 biologics, ranking among the top domestically in cutting-edge fields like CAR-T, ADC, and gene therapy. Biological drug revenue accounts for over 60%, with gross margins above industry average. For example, the safety evaluation data for Legend Biotech’s CAR-T product directly supported FDA approval, and such benchmark projects carry significant credit premiums in actual bidding.

Third, in capacity and order data, by 2025, the company’s animal housing area exceeded 100,000 square meters, doubling since 2022; new orders signed increased by 13.3% year-over-year, with ADC and small nucleic acid projects growing by over 50%. Cash flow from operating activities reached 266 million yuan in the first three quarters of 2025, demonstrating that even at the industry’s bottom, the company maintains self-sustaining capabilities, supporting future expansion and R&D investments.

Within the industry context, Zhaoyan New Drug’s recovery is not an isolated phenomenon. Industry estimates suggest that the global preclinical CRO market will reach $33.25 billion in 2026, with a compound annual growth rate of about 10%. The Chinese market is approximately 52.86 billion yuan, with a CAGR of 14.2%, significantly higher than the global level. Demand is driven by the rise of domestic innovative drugs, while supply has become more rational after recent cleanouts, with prices stabilizing gradually. Against this backdrop, leading companies with compliance qualifications, resource reserves, and scale advantages are accelerating order intake.

Market will ultimately return to rationality. For Zhaoyan New Drug, this turbulence triggered by share reduction may just be a typical, short-term “noise test” in its journey from cycle lows to a new growth phase. As trading pressures gradually clear, the key to its valuation ceiling will still be the more substantial data: 50,000 experimental monkeys, 2,300 safety evaluation projects, five GLP certifications, and a recovering industry demand curve.

Personal opinion, for reference only.