7 consecutive limit-ups! JinYao Pharmaceutical, with no ongoing innovative drugs in development, was suddenly surged?

What is the basis for the market misreading of Jinyao Pharmaceutical?

21st Century Business Herald Reporter Yan Shuo

In recent days, concept stocks related to innovative drugs have been repeatedly active. Data from Tonghuashun shows that since March 24, the gains of innovative drug concept stocks have exceeded 13%, with many stocks hitting the daily limit within the trading session.

Among them, Jinyao Pharmaceutical’s stock price movement has attracted particular market attention. The stock has experienced a cumulative deviation of 100% in its closing prices over 10 consecutive trading days (March 24 to April 7). From March 26 to April 7, the company’s stock hit the daily limit for seven consecutive days, with a total price increase of 93.69% during that period. As of the close on April 7, the stock price was 7.67 yuan per share, with a market value of approximately 8.38B yuan.

On the evening of April 7, Jinyao Pharmaceutical issued a notice emphasizing that the company has noticed the market listing it as an innovative drug concept and engaging in speculation. Currently, the company’s R&D mainly focuses on generic drugs, with no ongoing innovative drug projects, and the related hype involves obvious misinterpretation. The company’s main business involves the research, production, and sales of steroid hormones, amino acid raw materials, and formulations. Meanwhile, the company has noted discussions in the market about the prices of hormone raw materials. Currently, the prices of steroid hormone raw materials remain generally stable, having no impact on the company’s operating performance.

Jinyao Pharmaceutical also issued a risk warning in the announcement, stating that the company’s main business has not undergone significant changes. The stock price has surged sharply and continuously in the short term, with trading turnover rates continuously increasing. The price-to-earnings ratio (TTM) is significantly higher than the industry average, indicating obvious market irrational speculation. The company has a small circulating share, and after speculation, the stock price could fall rapidly at any time.

Soaring with the innovative drug concept stocks

Currently, biopharmaceuticals have been clearly identified as an emerging pillar industry. Innovative drugs have been elevated to a national strategic level. China’s innovative drug industry has bid farewell to extensive growth and entered a new stage of high-quality development, with R&D innovation at its core, facing new development opportunities.

According to the National Medical Products Administration, in the first three months of this year, China’s total external licensing transaction volume for innovative drugs exceeded $60 billion, approaching half of the total for 2025; as of March 27, China had approved 10 innovative drugs for 2026, including 2 imports and 8 domestics. China has achieved historic breakthroughs in innovative drugs, maintaining a good momentum and potential for development.

Industry insiders believe that recent policy efforts to increase innovation R&D, accelerate review and approval processes, and the significant growth in external licensing transactions, combined with major pharmaceutical companies releasing positive annual reports, have jointly supported the current logic of the innovative drug market. These factors are driving the industry’s positive development. As a result, innovative drug concept stocks are actively fluctuating in the secondary market.

Jinyao Pharmaceutical has been included in related concept stocks. However, it has not publicly disclosed much information about its innovative drug projects. In September 2025, during an investor interaction, Jinyao Pharmaceutical stated that in 2024, it established an Innovation Research Institute responsible for innovative drug design, discovery, R&D, and incubation. Currently, projects related to innovative drugs are in early exploratory research stages. In the future, the company will continue to improve its product pipeline and accelerate diversified and differentiated development.

Additionally, the JYSW003 project is an innovative drug project entrusted to Jinyao Biotechnology (Tianjin) Co., Ltd. by the company’s Innovation Research Institute. The indication is psoriasis. Preliminary exploratory research results show significant efficacy and excellent safety features. Currently, the project is proceeding normally according to the contract.

However, both the Innovation Research Institute and JYSW003 have little recent activity. Jinyao Pharmaceutical has repeatedly emphasized recently that its current R&D focuses on generics, with no ongoing innovative drug projects, and that the related hype involves obvious misinterpretation.

Industry analysts point out that before this round of price increases, Jinyao Pharmaceutical’s total market value was only over 5.74T yuan, with institutional holdings accounting for just 0.78%. Its shareholding structure is lightweight, with little selling pressure, making it an ideal target for speculative capital.

Between March 26 and April 7, Jinyao Pharmaceutical’s stock hit the daily limit for seven consecutive trading days. In the past three trading days, the stock’s turnover rates were 1.36%, 8.59%, and 16.15%, respectively. “The continuous increase in trading turnover, the ‘pump and dump’ effect, and market irrational speculation are obvious, with extremely high trading risks,” Jinyao Pharmaceutical pointed out.

As of April 7, Jinyao Pharmaceutical’s latest P/E ratio (TTM) was 513.94 times. According to the latest data from China Securities Index Co., Ltd., the industry classification “C27 Pharmaceutical Manufacturing” has a rolling P/E ratio of 29.26 times. Jinyao Pharmaceutical believes that its relevant indicators are seriously deviating from industry reasonable valuation levels, showing signs of bubble formation.

Performance under pressure

As one of the earliest domestic companies to develop and produce steroid hormone raw materials, Jinyao Pharmaceutical mainly engages in the research, production, and sales of steroid hormones, amino acid raw materials, and formulations. Its main products include dexamethasone series, prednisolone series, among more than 70 raw material varieties, as well as over 10 dosage forms such as injections and ointments.

In recent years, the company’s performance has come under pressure. In 2024, it achieved revenue of 8B yuan, a decrease of 15.00% year-on-year; net profit attributable to shareholders was 133 million yuan, up 14.01%. In the first three quarters of 2025, revenue was 3.22B yuan, down 13.24% year-on-year; net profit attributable to shareholders was 69.54 million yuan, down 62.75%; non-recurring net profit was 136 million yuan, down 26.06%.

Regarding the profit decline in the first three quarters of 2025, Jinyao Pharmaceutical stated that the main reasons were that, from the beginning of the year to the end of the reporting period, the company was subject to administrative penalties of 69.19 million yuan due to antitrust issues; additionally, impacts from centralized procurement, reduced terminal drug use, and intensified international market competition led to a significant decrease in product sales prices, resulting in declines in sales revenue and gross profit margins.

Among these, the antitrust issue drew widespread market attention. On April 30, 2025, Jinyao Pharmaceutical received the “Administrative Penalty Decision” from the Tianjin Market Supervision and Administration Bureau. The company, under the organization of relevant personnel, reached monopoly agreements with three competitors, changed and fixed the prices of dexamethasone sodium phosphate raw materials, and restricted competition in the sales of dexamethasone sodium phosphate raw materials, resulting in a fine of 69.19 million yuan.

Regarding centralized procurement, Jinyao Pharmaceutical’s subsidiary, Jinyao Heping, participated in the tenth batch of national drug centralized procurement for aminophylline injections, fluorouracil injections, ephedrine hydrochloride injections, and norepinephrine bitartrate injections, leading to price reductions for these products. This batch of procurement was implemented nationwide in April 2025.

Additionally, the company received regulatory measures due to internal control issues. On January 27, 2026, Jinyao Pharmaceutical received a “Regulatory Measures Decision” from the Tianjin Regulatory Bureau of the China Securities Regulatory Commission. The investigation found issues including: some external technical projects used standardized contracts with unclear breach responsibilities, and the company failed to identify termination risks of some R&D projects in a timely manner, leading to delays in recovering prepayments. The Tianjin Securities Regulatory Bureau decided to require the company to make corrections and issued warning letters to Xu Hua, Li Shuxiang, Wang Fujun, Zhang Jie, and Yang Fuzhen.

Currently, Jinyao Pharmaceutical is addressing these issues one by one to ensure effective rectification.

For enterprises, only by deeply cultivating their main business and solidifying R&D and operational fundamentals can they truly withstand market fluctuations. This hype will eventually fade, leaving the market with deeper reflections on short-term speculation versus long-term investment.