Core Viewpoint - The innovative drug sector has become a focal point in the A-share market, with Shuyou Shen (300204.SZ) emerging as a standout performer, experiencing significant stock price increases despite ongoing operational challenges [1][5]. Stock Performance - On June 4, Shuyou Shen opened high but closed at 30.79 CNY per share, down 3.18% from the previous day. The stock price surged from 11.04 CNY to 31.80 CNY between May 20 and June 3, marking a 188.04% increase over 10 trading days. From a low of 5.90 CNY on April 9, the stock has risen by 438.98% [2][11]. - The company's market capitalization increased by approximately 12.4 billion CNY due to the stock price surge [15]. - Institutional investors played a significant role in the stock's rise, with substantial buying activity noted on multiple trading days [13][14]. Financial Performance - Despite the stock price increase, Shuyou Shen's operational performance remains under pressure, with a 33.45% year-on-year decline in revenue for Q1. The net profit attributable to shareholders was -2.34 million CNY, although this represented a 38.05% reduction in losses compared to the previous year [2][19]. - The company has reported cumulative losses exceeding 1 billion CNY over five consecutive years from 2020 to 2024 [3][19]. - In 2024, the company’s revenue from its main products, Shutaqing and Sutai Sheng, declined, with sales of Shutaqing at 1.79 billion CNY (down 8.20%) and Sutai Sheng at 1.34 billion CNY (down 17.30%) [19]. Research and Development - Shuyou Shen's R&D investment dropped significantly to 162 million CNY in 2024, a decrease of 63.84% year-on-year [4][20]. - The company has reduced its R&D personnel by 14.75%, with R&D staff now comprising 21.14% of the total workforce [20]. - Despite the decline in R&D spending, the company has multiple I-class innovative biological drugs in clinical trials and is focused on advancing projects in areas such as neurological diseases and infectious diseases [20].