A monkey was sold for 200,000 yuan, while Zhaoyan New Drugs was hit by a limit-down order on the stock market.

Summary of Key Points

Zhao Yan New Drug has recently seen a sharp increase in the price of experimental monkeys (up to 200,000 yuan per monkey), coupled with an adjustment in accounting policies (measuring experimental monkeys at fair value). As a result, the company's net profit for the first half of the year is expected to have increased by nearly 14 times. However, this profit almost entirely comes from the appreciation of the monkeys on the books, rather than real growth from its main business (pharmaceutical research and development outsourcing services). The stock price initially soared due to these impressive financial results, hitting consecutive daily limit-up levels, but then plummeted due to market doubts about the "real value" of this profit, as well as a general decline in the broader market and the realization of profits by investors. In the long term, experimental monkeys face competition from technological alternatives (such as AI and organoids) and ethical pressures. If Zhao Yan New Drug continues to rely on monkey prices to support its profits, there is significant uncertainty ahead.

1. Experimental Monkeys for 200,000 Yuan? Surging Demand, but Supply Constraints

Experimental monkeys (mainly rhesus monkeys) can sell for up to 200,000 yuan each, primarily due to a severe imbalance between supply and demand:

• Demand Side: The innovative pharmaceutical industry is thriving, and companies need more experimental monkeys for pre-clinical research (such as toxicity and metabolism tests). CROs (contract research organizations that provide R&D outsourcing services for pharmaceutical companies) are placing more orders, driving up the demand for monkeys.
• Supply Side: Monkeys are slow-to-produce animals—rhesus monkeys give birth to only one offspring per litter, and it takes 3-5 years from birth until they meet experimental requirements. Even if breeding efforts are increased now, it will still take several years before new monkeys become available for sale. Additionally, many farms reduced breeding during previous price declines, leading to a current supply shortage.
• Price Changes: The price of a monkey was only 7,000 yuan a few years ago, rose to 160,000 yuan in 2022, then fell, and has started to rise again in the second half of 2025. Currently, mixed batches of male and female monkeys are sold for 190,000 yuan each, and adult female monkeys are in high demand, with some even unavailable despite the price (this year's supply has already been booked out).

2. A 14-Fold Increase in Profit? The Secret Lies in the "Book Value" of Monkeys

Zhao Yan New Drug's sudden profit increase is not due to actual business performance but rather accounting tricks:

• Accounting Policy Change: In 2021, the company switched from using a cost-based valuation method to a fair value method for experimental monkeys. Simply put:
• Cost-Based Method: The price paid for the monkeys is recorded at the time of purchase, with depreciation over time.
• Fair Value Method: At the end of each reporting period, the monkeys are revalued based on current market prices, and any increase in value is recorded as profit (even if the monkeys have not been sold).
• Profit Source: In 2025, fair value changes contributed 476 million yuan to profits, while the main business (laboratory services) incurred a loss of 164 million yuan. In the first quarter of 2026, net profit was 238 million yuan, of which 246 million yuan came from the appreciation of monkeys (while the main business still lost 28.46 million yuan). For the first half of the year, expected profits of over 700 million yuan were entirely due to the increase in monkey prices, with revenue only increasing by 0-10.5%.
• Note: This profit is a book figure and does not represent actual cash received from customers; if monkey prices fall, it could turn into a loss.

3. Stock Price Volatility: Market Doubts About the "Real Value" of Profits

The stock price's dramatic fluctuations reflect changes in market perception of the profitability of the company:

• Limit-Up Logic: Initially, investors were attracted by the 14-fold increase in net profit and bought shares, driving consecutive daily limit-up levels.
• Limit-Down Reason: Later, it became clear that the profit was mainly due to the appreciation of monkeys on the books, not real growth from the main business. It's like your house increasing in value on paper, but you haven't sold it—thus, no actual money has been earned. Combined with a general market decline, investors who had made profits quickly realized them, causing the stock price to fall.
• Valuation Dilemma: Zhao Yan New Drug's market value is nearly 40 billion yuan, with net assets of 8.5 billion yuan, resulting in a price-to-book ratio of over 4 times. This valuation would be reasonable for an excellent CRO company based on its technology and orders. However, given that the company's main assets are monkeys and financial investments, a 4-fold ratio seems high. Are investors buying into a pharmaceutical company or a "monkey investment fund"?

4. Shareholders Busy With Cash Outflows? insiders Looking to Lock in Profits

Some long-term shareholders have reduced their holdings when monkey prices and stock prices were high:

• In 2022, both monkey prices and stock prices were high, with several shareholders cashing out more than 1.8 billion yuan.
• From March to June this year, Gu Xiaolei and Gu Meifang sold 22.48 million shares for 630 million yuan, reducing their ownership to less than 1% (almost completely liquidating their holdings).
• Although they claimed it was due to personal financial needs, their actions suggest they believe the current price is a good time to sell. After all, monkey prices cannot continue to rise indefinitely, and there are uncertainties ahead.

5. Long-Term Risks: Monkeys May Be Replaced, Leading to Job Losses?

The "golden age" for experimental monkeys may not last long due to several factors:

• Technological Alternatives: The high cost of monkeys is prompting pharmaceutical companies to use AI models, organoids (miniature organs grown from human cells), and organ chips (simulating human organ functions) for experiments, which could reduce or even replace the need for monkeys. For example, AI can screen potential drugs in advance, allowing only the most promising candidates to proceed to animal tests, thus reducing the number of monkeys needed.
• Ethical Pressures: Animal rights organizations are suing research institutions for exposing videos of monkey suffering, and public opposition to animal experiments is growing.
• Regulatory Trends: Countries like the United States, the UK, and China are encouraging non-animal experiments. For instance, the US allows drug applications using cell models, and China's seven departments are promoting the use of AI and virtual screening in drug development.
• Zhao Yan New Drug's Challenges: If the company relies solely on monkey prices for profits, it will face significant losses when demand declines. However, if it can transition to provide services related to these alternative technologies (such as organoid validation), there may still be opportunities, but no clear actions have been taken so far.

Conclusion

Zhao Yan New Drug is currently benefiting from high monkey prices, but its long-term value lies in the competitiveness of its main business (pharmaceutical research and development services). The capital market may support short-term bubbles in monkey prices, but a company's sustainable premium must be based on technology, orders, and barriers to entry. When monkeys become less scarce, what will sustain Zhao Yan New Drug's success? This is a question the company must answer.