Summary of Key Points
Recently, the "monkey module" concept has become extremely popular in the A-share market, sparked by Zhaoyan New Drug's semi-annual report forecast: net profit increased by 884%-1377%. However, approximately 700 million yuan of this increase was due to the rise in the price of experimental monkeys, which resulted in a gain on paper (not actual cash from selling monkeys). The company's stock price has risen, driving up the prices of stocks related to "stockpiling monkeys." The truth behind this phenomenon is that Zhaoyan New Drug's main business (drug safety assessment services) has been losing money for three consecutive years, and its profits have relied solely on fluctuations in monkey prices. Experimental monkeys cost 200,000 yuan each due to slow breeding rates, high entry barriers, and strong demand. The monkeys from Emei Mountain do not meet the standards for use as experimental animals because of their breed and lack of necessary qualifications. Whether the "monkey market" can continue in the future depends on the supply-demand gap and whether Zhaoyan New Drug's main business can improve.
I. Zhaoyan New Drug's Profits: Gains from Rising Monkey Prices, Not Real Cash
Zhaoyan New Drug's primary business is providing safety assessments for innovative drug companies (for example, testing whether drugs are toxic), accounting for over 95% of its revenue. However, it has been in the red for the past three years:
- In 2024, main business revenue declined, and gross profit margin dropped to 28%. Coupled with falling monkey prices, net profit for the year was only 74 million yuan (the lowest since the company went public), causing even the social security fund to withdraw its investment.
- In 2025, the main business continued to lose 164 million yuan, but the rebound in monkey prices led to a paper gain of 450-499 million yuan, which offset the losses.
- The semi-annual report for 2026 indicates that about 700 million yuan of the profit came from changes in the fair value of biological assets. In simple terms, the company's stock of monkeys increased in value on paper, but no actual sales were made (the highest income from selling monkeys in the past three years was only 7.75 million yuan).
Therefore, this profit increase is more of a "paper fortune" rather than real cash earnings.
II. Why Are Experimental Monkeys So Expensive?
The high price of experimental monkeys is not due to speculation but a genuine imbalance between supply and demand:
1. Slow Breeding: Female monkeys reach sexual maturity at the age of 4 and can only give birth to one baby per year (rarely two). During the period when monkey prices soared from 2020 to 2022, many farms sold their breeding females for cash. Now, the remaining females are older, with fewer capable of reproducing, leading to a shortage of qualified experimental monkeys.
2. High Barriers: Monkeys must be free from five types of pathogens and have clear three-generation lineage records. There are only 57 compliant monkey farms in China, and new farms take up to five years to start producing monkeys.
3. Strong Demand: The development of innovative drugs (especially antibody and gene therapies) has surged, with clinical trials increasing by 18% year-on-year in 2025. These drugs can only be tested on humans and primates; using mice is ineffective.
These factors combined have driven monkey prices up from 92,000 yuan last year to 190,000 yuan currently, and prices are expected to continue rising.
III. Why Are Monkeys from Emei Mountain Unsuitable?
Monkeys used in scenic areas (such as the Tibetan macaque) are not suitable for experiments:
- Incorrect Breed: Experimental monkeys are primarily Rhesus monkeys (accounting for 90% of usage). They are smaller, cheaper to maintain, can breed throughout the year, and are more docile, making them ideal for experiments. Tibetan macaques are larger, more aggressive, and have limited breeding data.
- Lack of Qualifications: Experimental monkeys must meet specific health requirements, but the monkeys from Emei Mountain do not have the necessary certifications or health records.
- No Alternative: Even if wild monkeys could be used, Rhesus monkeys are classified as second-class protected animals in China, and capturing them would be illegal.
IV. How Long Will the "Monkey Market" Continue?
Brokerages predict that the supply-demand gap for experimental monkeys will persist from 2026 to 2028, leading to stable prices. Short-term interest in stocks related to stockpiling monkeys may remain, but long-term success depends on two factors:
1. Whether Zhaoyan New Drug's main business can turn around: The company received 111% more new orders in 2026, with 3.1 billion yuan in pending contracts. Brokers expect the gross profit margin to improve in the second half of the year, but if the main business does not improve, the stock price will not be sustained by merely rising monkey prices.
2. Actual Production Capacity: Zhaoyan New Drug has 20,000 monkeys in its herd, but the key is how many of them are capable of reproducing and can be sold as commercial products. If the age structure of the herd is too old, future production may not meet demand.
In summary, the "monkey module" is a short-term craze, but the value of experimental monkeys is determined by real supply and demand. When investing in Zhaoyan New Drug, focus on its main business's ability to generate profits, not just on monkey prices.
Bonus: Funny Internet Memes
Netizens have jokingly referred to experimental monkeys as "monkey modules" and Emei Mountain as a "monkey storage facility." They have also created memes like "photolithography bananas" (a play on photolithography resins) and linked optical communication companies (such as Dongshan Precision and Changguang Huaxin) to baboons and monkeys. These are just fun memes and should not be taken seriously!
(End of the translation.)