Rising prices for experimental monkeys are continuing to fuel a dramatic increase in earnings for Joinn Laboratories (China) Co.,Ltd. (SH: 603127). Following the market close on July 14th, the company released a performance forecast projecting revenue of approximately RMB 6.69 billion to RMB 7.39 billion for the first half of 2026, representing a year-on-year increase of about 0% to 10.5%.

Despite this modest revenue growth forecast, the company's net profit is expected to surge significantly. Joinn Laboratories anticipates net profit attributable to shareholders of between RMB 6 billion and RMB 9 billion for the period, marking a staggering increase of roughly 884.9% to 1377.4% compared to the same period last year. Its core net profit, excluding non-recurring gains and losses, is forecast to grow by an even more remarkable 2334.2% to 3551.3%.

The contribution from experimental monkeys to the company's performance is particularly pronounced. The forecast indicates that the change in fair value of biological assets contributed approximately RMB 7.03 billion to RMB 7.77 billion to net profit. The company's primary biological assets are non-human primate experimental models, commonly referred to as lab monkeys.

Joinn Laboratories stated that a combination of rising market prices for these biological assets and their natural growth has driven a positive fair value adjustment, making a substantial positive contribution to its financial results. The company previously explained on investor platforms that price increases for monkeys can gradually be passed through to new contract orders, leading to corresponding increases in product sales prices.

While higher monkey prices raise procurement costs for laboratory use, temporarily pressuring gross margins for the main business, they simultaneously create fair value gains on the biological assets, thereby boosting reported net profit. The company's 2025 annual report showed a net gain of RMB 4.76 billion from changes in the fair value of biological assets.

The upward trend in experimental monkey prices has persisted into 2026. A public tender announcement on June 29th from the National Institutes for Food and Drug Control for the procurement of 40 cynomolgus monkeys, with a total budget of RMB 7.6 million, implies a unit price of RMB 190,000 per animal.

However, after excluding the impact of fair value changes on biological assets, the net profit from Joinn Laboratories' core laboratory services and other businesses is estimated to range from a loss of RMB 141 million to a profit of RMB 64.97 million. This suggests that, without the influence of monkey price fluctuations, the company's primary laboratory services business could potentially be operating at a loss.

The company clarified that its laboratories maintained stable and sound operations during the reporting period. Although the industry is recovering overall, the lingering effects of previous intense competition meant revenue growth was minimal and gross profit levels have yet to fully rebound.

Joinn Laboratories is primarily engaged in pre-clinical research services, predominantly non-clinical safety evaluation for drugs, as well as the sale of laboratory animals and related products. Its main services include non-clinical research, clinical services, and the supply of other experimental models. As a leading player in domestic safety evaluation, laboratory animals are critically important to the company.

Experimental animals serve as the essential carriers for conducting non-clinical safety evaluations and pharmacodynamic and pharmacokinetic studies. The availability of animal models directly impacts the capacity to perform safety assessments and can influence experimental outcomes. Recent data suggests robust demand for early-stage innovative drug research and development in China, indicating that the domestic pre-clinical Contract Research Organization sector remains in a favorable growth cycle.

Within this sector, safety evaluation services are the most constrained in the short term due to domestic shortages of experimental monkeys, making it a segment with significant potential for volatility this year. New order intake for Joinn Laboratories and another firm in the first quarter of 2026 reached RMB 910 million and RMB 730 million respectively, representing year-on-year growth rates of 112% and 199%.

In April 2026, Joinn Laboratories commented on the outlook for monkey prices, noting that price changes are primarily driven by supply and demand dynamics. Current demand has recovered, leading to a tight supply-demand balance. However, with signs of easing import policies for monkeys in China and other uncertainties, the future price trajectory requires ongoing monitoring.

In the previous year, 2025, the company had already leveraged gains from biological asset fair value changes to achieve a 1221.30% year-on-year increase in its core net profit, even as its revenue declined.