A significant development has emerged in the pharmaceutical sector involving Joinn Laboratories. The situation began when the company announced on Sunday evening that shareholders Gu Xiaolei and Gu Meifang planned to reduce their combined holdings by 30.74 million shares, representing 4.1% of the company's total equity.
As acting-in-concert parties and the fourth and seventh largest shareholders of Joinn Laboratories respectively, Gu Xiaolei and Gu Meifang currently hold exactly 30.74 million shares. This divestment plan effectively indicates their intention to completely exit their positions.
The announcement immediately sparked market concerns. On March 17, Joinn Laboratories' stock price hit the daily downside limit. Facing a nearly 1 billion yuan reduction plan, retail investors naturally moved to sell first. Possibly recognizing the unsustainable pressure on the share price, the two shareholders issued a supplementary announcement on the evening of March 17, indicating they would sell a smaller portion.
They now plan to reduce their holdings by 3%, which would realize approximately 700 million yuan.
Before the Spring Festival, Joinn Laboratories had attracted speculative interest due to rising prices of laboratory monkeys. Although its market capitalization has declined from previous highs, it remains relatively competitive among CRO enterprises. A full exit by major shareholders would undoubtedly significantly impact the company, quickly drawing public attention to the two Gu family shareholders.
The Gu family from Taicang, Suzhou is a renowned name in China's pharmaceutical industry. Two A-share companies are closely associated with the Gu family: Staidson Pharmaceuticals and Joinn Laboratories. Over recent years, the Gu family has been consistently reducing its stake in Staidson Pharmaceuticals. While their shareholding in Joinn Laboratories has fluctuated, the overall trend had been toward accumulation.
Furthermore, the Gu family has deep historical connections with the founders of both listed companies. Their sudden decision to completely divest suggests underlying factors at play.
The Gu family's operations are backed by the locally prominent township enterprise Xiangtang Group. Gu Xiaolei's grandfather, Gu Jianping, served as the secretary of Xiangtang Village in the 1970s. He earned his initial capital by processing corduroy slippers for Shanghai enterprises, earning the nickname "Slipper King." Gu Xiaolei's father, Gu Zhenqi, currently serves as Chairman of Xiangtang Group, and Gu Meifang is Gu Zhenqi's sister.
The Gu family first entered the biopharmaceutical industry in 2002. Through an introduction from a Japanese partner, Gu Jianping met the entrepreneurial couple Feng Yuxia and Zhou Zhiwen, who had started a business in Beijing. Gu Jianping decided to invest 30 million yuan in the couple's pharmaceutical venture, which later became Staidson Pharmaceuticals.
Even before establishing Staidson Pharmaceuticals, Zhou Zhiwen and his wife had founded Joinn Laboratories. The Gu family invested in Joinn Laboratories in 2008, largely forming the shareholding structure seen today.
Joinn Laboratories broadened the Gu family's perspective on biopharmaceutical investments, as CROs provide technical services to downstream biotech companies. Subsequently, Xiangtang Group invested in nine biopharmaceutical enterprises, including Suzhou Connect Biopharma, Suzhou Jinmeng Biotechnology, Suzhou Hybio Pharmaceutical, and Suzhou Sitanwei Biotechnology, with varying ownership stakes.
Without exception, these companies invested in by Xiangtang Group became major clients of Joinn Laboratories during its initial public offering.
Looking more broadly, the Gu family's connections extend beyond just two listed companies. In 2014, Salubris Pharmaceuticals fully acquired Suzhou Jinmeng Biotechnology, integrating it as Salubris Suzhou Pharmaceutical, leading to Xiangtang Group's exit from that venture.
Had this trajectory continued, Xiangtang Group might have potentially developed into a second Fosun Pharma over time. Notably, the group did not significantly reduce its stake in Joinn Laboratories even when the share price was at previous highs. This makes their current decision to fully divest particularly puzzling.
While detailed internal information is unavailable, some public data can be examined.
On September 7, 2022, the All-China Federation of Industry and Commerce released the "2022 Top 500 Manufacturing Private Enterprises in China" list. Xiangtang Group ranked 476th, with disclosed annual revenue of 13.523 billion yuan, presumably referring to 2021 revenue.
On September 29, 2023, Jiangsu province published the "2023 Top 100 Private Enterprises in Jiangsu" list. Xiangtang Group ranked 87th, with disclosed 2022 revenue of 14.52 billion yuan, showing significant growth from the previous year.
On October 12, 2025, the Jiangsu Federation of Industry and Commerce released the "2025 Top 200 Private Enterprises in Jiangsu" list in Xuzhou, which included 168 companies with annual revenue exceeding 10 billion yuan. Xiangtang Group ranked 172nd, with reported 2024 revenue of 9.804 billion yuan.
Xiangtang Group currently operates four main business segments, with biopharmaceuticals being the primary one, followed by intelligent manufacturing, financial venture capital, and real estate. The significant fluctuation in revenue can likely be attributed to changes within specific segments.
Analyzing such a large conglomerate is complex. Regarding Joinn Laboratories, previous analyses have been conducted.
On January 21, Joinn Laboratories issued a positive profit forecast: the company expects its 2025 revenue to decrease by 13.9% to 22.1% compared to the previous year. However, net profit is projected to increase by at least 159 million yuan, representing year-on-year growth of 200% to 300%.
How can profit surge significantly while revenue declines substantially? Joinn Laboratories was transparent, explicitly stating that changes in the fair value of biological assets contributed over 450 million yuan to net profit.
To explain briefly, A-shares value living assets, termed "biological assets," at fair value. For Joinn Laboratories, this specifically means valuing its monkey inventory based on year-end market prices.
According to Joinn Laboratories' data, monkey prices declined throughout 2024, leading to an impairment provision of nearly 200 million yuan that year. At the beginning of 2025, the book value of biological assets was 383 million yuan. However, by the end of June, with monkey prices still falling, the company recorded an additional loss of 22.14 million yuan.
Furthermore, for the second half of 2024 and the first half of 2025, the "current period change" on the company's books—representing monkeys sold, disposed of, or culled—decreased significantly year-on-year. The H2 2024 change was approximately 17 million yuan, dropping to just 7.09 million yuan in H1 2025.
Correlating these data points suggests that, at least until the first half of last year, both monkey prices and actual market demand were on a downward trend.
Yet, according to Joinn Laboratories, monkey values suddenly surged in the second half of 2025, with fair value gains exceeding 450 million yuan. Considering that the value of these monkeys was only 360 million yuan at the end of June last year, this implies that monkey prices more than doubled within six months.
Reviewing two official procurement notices provides context. One from the Wuhan Institute of Virology, Chinese Academy of Sciences, dated April 25, 2025, was a single-source procurement notice budgeting 855,000 yuan for nine cynomolgus monkeys. Another from the Shanghai Institute of Materia Medica, Chinese Academy of Sciences, dated February 26 this year, budgeted 62 million yuan for 450 cynomolgus monkeys.
While monkey prices did rise considerably within six months, the specific valuation methodology for caged monkeys remains unclear.
On February 26 this year, an article titled "Actively Seizing the High Ground in Digital Cell Technology" was published. It introduced the new concept of "digital cells," which includes "simulated cells," referencing the FDA's push last year to gradually phase out animal testing in favor of AI toxicity prediction models, organoids, and other alternative testing methods.
The significance of this publication is well understood. The concept of digital cells is timely, especially given today's news that Roche plans to purchase 2,176 Nvidia chips to expand its AI infrastructure.
The AI competition between China and the United States will inevitably impact the pharmaceutical industry. The future value of monkeys may therefore become less critical. This could be one reason behind the Taicang Gu family's decision to divest from Joinn Laboratories.
Comments