Within 5 days, the stock price violently surged by more than 50%. Can the "sky-high monkey" become a damping device for the volatile market of Joinn Laboratories (06127)?

Within 5 trading days, the stock price violently rose by over 50%, and when the "sky-high monkey" market came, Joinn Laboratories (06127) once again staged a drama of simultaneous increase in volume and price. It was learned that on July 15, Joinn Laboratories released its 2026 interim performance forecast. The data shows that the company's revenue for the first half of the year is expected to be between 669 million and 739 million yuan, a year-on-year increase of 0% to 10.5%; at the same time, its net profit attributable to shareholders is expected to be as high as 600 million to 900 million yuan, a year-on-year increase of 884.9% to 1377.4%; corresponding to the non-GAAP net profit of 561 million to 842 million yuan, a year-on-year increase of more than 35 times. On July 15, Joinn Laboratories' Hong Kong stock price opened high and rose, with the largest intraday increase reaching 29.73% and the highest price reaching 28.94 Hong Kong dollars. The next day, Joinn Laboratories stock price rose to 29.98 Hong Kong dollars, bringing the stock price back to the 30 Hong Kong dollar mark. The take-off of the "sky-high monkey" and the resurgence of the "monkey market" Each take-off of the "sky-high monkey" market is accompanied by a continuous increase in domestic innovation and research and development activities. Since the beginning of this year, the fundamental feature of the innovative pharmaceutical sector is the high deviation between stock prices and fundamentals. During this period, both the stock prices of AH-listed innovative pharmaceutical companies remained under pressure and corresponding indices oscillated downwards. Even leading enterprises struggled to escape from valuation contraction. In fact, behind the downward trend of Hong Kong pharmaceutical stocks, there are multiple resonating factors such as financial conditions, market sentiment, and geopolitical issues. On the financial side, in the first half of this year, Hong Kong stocks performed strongly in AI computing power, semiconductors, and other technology sectors, attracting a large amount of active funds. In contrast, innovative pharmaceuticals, as a long-term, low-frequency catalyst race, faced liquidity diversion from the impact of the tech sector's "siphon effect". Furthermore, the globally tense geopolitical situation accelerated the uncertainty of the US Federal Reserve's monetary policy. The market's recent bets on the postponement of rate cuts or even interest rate hikes by the Federal Reserve have directly led to a tightening of global liquidity. For innovative pharmaceuticals, which are sensitive to interest rates, this undoubtedly directly suppressed their valuation level. However, on the fundamental level, the National Medical Products Administration disclosed that as of the end of June 2026, a total of 38 first-class innovative drugs had been approved for listing in the first half of the year, of which 11 belonged to new targets and mechanisms, all independently developed by Chinese enterprises. At the same time, in the first half of this year, the amount of outbound transactions for Chinese innovative drugs reached 110 billion US dollars, once again breaking historical records; and at this year's ASCO Annual Meeting, Chinese research had a total of 94 entries in the oral presentation session, with 12 latest breakthrough abstracts (LBA), both of which are historical highs. The above data validates the continuous improvement of the research and development capabilities and clinical efficiency of Chinese innovative pharmaceutical companies, clarifying the prosperity cycle of the domestic innovative pharmaceutical industry. And this is the key support for the surge in monkey prices. In fact, as early as December last year, market speculation about the "sky-high monkey" had begun. Market data shows that the price of around 3-5-year-old rhesus monkeys had risen to 140,000 yuan each at that time, leading to a situation of supply shortage. This market price had increased by over 50% compared to the cost price of 90,000 yuan per rhesus monkey acquired by the company through acquisition in 2022. In addition, according to Founder's calculation, the supply of experimental monkeys from 2025 to 2027 is expected to be approximately 49,000 to 52,400 annually, and the demand for experimental monkeys is approximately 51,300 to 62,600 annually. The firm believes that due to the rebound in new drug research and development in the short term, driving an increase in the use of experimental monkeys, and the difficulty in short-term improvement on the supply side, the supply-demand gap may continue to widen. It is understood that the reason why the upward cycle of monkey prices can directly affect the performance of Joinn Laboratories is that in the 2020 annual report, Joinn Laboratories changed its measurement method of biological assets of experimental monkeys from the previous "cost method" to the "fair value method." The result of this change in accounting policy is that when the prices of biological assets show continuous appreciation, the appreciation is released in the current period's financial statements. In other words, the beginning and end of the surge in monkey prices will directly impact the company's net profit. Standing at the crucial time node of performance disclosure, holding 50,000 experimental monkeys and then using the advantage of existing stockpiles to drive the revival of orders undoubtedly puts Joinn Laboratories in a favorable position within the CXO industry recovery interval. Will the Hong Kong stock connect funds move from divergence to consensus? From the market perspective, with the recent surge in stock prices driven by performance forecasts, Joinn Laboratories' Hong Kong stock price reached a high of 29.98 Hong Kong dollars, setting a new high since January 2023. However, the road to a new high in Joinn Laboratories' stock price has not been smooth since January. From a technical perspective, after hitting a high on January 14, Joinn Laboratories' stock price quickly made a technical return to the BOLL middle rail, and subsequently oscillated between the BOLL middle and lower rails for 2 months until reaching a temporary low of 14.99 Hong Kong dollars on March 23. In the following three months, Joinn Laboratories' stock price once again "took a roller coaster ride" but also confirmed a W-bottom on June 9, laying the technical groundwork for the subsequent main upward trend of the "sky-high monkey" market. The oscillating market of Joinn Laboratories until confirming a double bottom on June 9 and continuing to show small negative and positive candlesticks indicated signs of a halt to the decline, and during this period of fluctuation, the Hong Kong stock connect funds once again became the main force in absorbing chips in the market. However, there was a divergence between the two stock funds, Hong Kong Stock Connect (Shenzhen) and Hong Kong Stock Connect (Shanghai). Looking at a longer timeline, in the past 60 days, the top five selling positions of Joinn Laboratories were held by Hong Kong Stock Connect (Shenzhen), Citibank, UBS, Morgan Stanley, and BNP Paribas, with Hong Kong Stock Connect (Shenzhen) being the largest seller, with a net selling of 2.5033 million shares; as for the buying side, China Investment (Shanghai-Hong Kong Connect) was the largest buyer, with a net purchase of 5.9209 million shares. This performance indicates that the recent off-market holders of Joinn Laboratories are mostly mainland retail investors from the Hong Kong Stock Connect, while it also shows that the two Hong Kong Stock Connect funds have a certain divergence in their holding strategies for Joinn Laboratories. However, by calculating the holding proportion, China Investment (Shanghai-Hong Kong Connect) and China Chuangying (Shenzhen-Hong Kong Connect) are still the largest holding brokers for Joinn Laboratories, with proportions of 39.48% and 20.75% respectively. After showing a large positive candlestick of over 20 cm on July 15, Joinn Laboratories also saw a significant pullback under the influence of a decline in the A-share market. This was mainly due to the public release of major hawkish views by FOMC voter and President of the Dallas Federal Reserve, indicating a direct impact on the pricing logic of global growth assets. In fact, the underlying logic behind the recent sharp drop in the innovative pharmaceutical sector over the past two trading days is closely tied to the characteristics of the race assets and the monetary policy of the Federal Reserve: if the market continues to maintain a high-interest rate environment in the future, the difficulty for innovative pharmaceutical companies to borrow in US dollars and raise equity will further increase. Unprofitable innovative pharmaceutical companies continue to burn money for clinical trials and pipeline expansion, and the rising financing costs directly exacerbate operational pressures, thereby inducing accelerated selling of mid-cap biotech stocks. Therefore, for some market funds in the short term, the choice of securing profits may have been made. However, in the recent broker transaction data, Hong Kong Stock Connect (Shanghai) and Hong Kong Stock Connect (Shenzhen) have both chosen to net buy Joinn Laboratories. The logic behind this may be in the mid-to-long-term perspective, where domestic innovative pharmaceutical companies are relying on strong fundamentals to counteract the negative impact of liquidity. For Joinn Laboratories, maintaining high monkey prices in the innovative pharmaceutical boom cycle or continuously improving the company's fundamentals may effectively hedge against panic sentiment in the market.