Shareholders' "clearance sale" divestment causes stock price to plummet; related shareholders of Zhaoyan New Drug are busy adjusting their divestment plans.

Just one day earlier, Zhaoyan New Drug released an announcement stating that the company’s shareholders, Gu Xiaolei and his persons acting in concert, Gu Meifang, plan to, within three months after three trading days from the date of the announcement of the reduction plan, reduce their holdings respectively by 20.42 million shares and 10.32 million shares, totaling 30.74 million shares, through centralized bidding on the SSE, representing 4.1% of the company’s current total share capital. As of the date the announcement was disclosed, Gu Xiaolei and Gu Meifang respectively hold 20.42 million A-shares and 10.32 million A-shares of the company, with shareholding ratios of approximately 2.73% and 1.38%, respectively. This also means that the above-mentioned shareholders originally intended to reduce their Zhaoyan New Drug A-share holdings in a “clear-out” manner.

Affected by this development, on March 17, Zhaoyan New Drug’s A-shares and H-shares both fell sharply, with A-shares closing at the daily limit down, quoted at the limit-down price of 29.32 yuan per share, down 10.01%. In terms of H-shares, Zhaoyan New Drug closed down significantly by 11.73%, with a closing price of 16.78 Hong Kong dollars per share.

The announcement shows that the two shareholders planned to reduce holdings are both the company’s pre-IPO issuing shareholders. The source of the shares is pre-IPO lock-up shares and shares transferred from the company’s capital reserve, among others. The planned reduction reasons are due to their own capital needs.

In the view of Zhang Yue, Chairman of Ouyi International, the adjustment to the planned reduction this time is a cooling-off and gradual-release move. By cutting the scale and pairing it with large-block transactions that would cause less impact to the order book, the intent is to stabilize expectations and reduce selling pressure. However, it still constitutes a large-scale reduction, and it has not been canceled or postponed—only the intensity of the impact has been lowered. The negative signals brought by the reduction have not been fully eliminated, and the subsequent price trend will still depend on the company’s fundamentals and industry market conditions.

In fact, this is not the first announcement in recent times from Zhaoyan New Drug regarding shareholders planning to reduce their holdings. At the end of last year, one of the company’s actual controllers, Zhou Zhiwen, disclosed a reduction plan, intending to reduce holdings of no more than 2% of the company’s total share capital at that time. As of January 29, Zhou Zhiwen had reduced 14.979 million A-shares through block trades and centralized bidding transactions, representing a reduction ratio of about 2%, and decided to terminate the reduction plan early.

In the secondary market, since 2025, the A-share price of Zhaoyan New Drug has generally trended upward, with gains of more than 70% in terms of post-adjusted basis. However, since mid-January of this year, when the stock reached a period high, the share price has started to decline continuously.

It is worth noting that, in terms of performance, Zhaoyan New Drug has delivered a “strong performance report” with a significant growth surge. The company’s 2025 performance forecast indicates that it expects attributable net profit for 2025 to be approximately 233 million to 349 million yuan, a year-on-year increase of about 214% to 371%. Zhaoyan New Drug stated that during the reporting period, the rise in market prices of biological assets, together with the appreciation from its own natural growth, drove positive fair value changes for the company’s performance, contributing positively to its results. Previously, a reporter from Beijing Business Today had reported that at the end of 2025, the price of laboratory rhesus macaques soared sharply, and Zhaoyan New Drug, known as “Houmao,” benefited as a result.

However, Zhaoyan New Drug also mentioned that during the reporting period, the company’s laboratories continued to maintain good and stable operations, but due to the lagging effect of fierce industry competition in the prior period, the revenue and gross margin ratio of contracts performed during this reporting period declined year over year, and the profit contribution from the laboratory services business decreased.

Regarding related issues of the company, a reporter from Beijing Business Today attempted to contact relevant company executives of Zhaoyan New Drug for an interview, but as of the time of publication, no response had been received.

By/ Ding Ning, Beijing Business Today

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