Analysis of InnoStar (688710) as a Strong Stock: Concept-Driven Valuation Recovery

January 7, 2026 | The stock performed strongly today and entered the Strong Stock Pool

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InnoStar (688710) performed strongly today, with an intraday increase of over 10%, successfully entering the Strong Stock Pool[1]. This performance is not an isolated incident, but is closely related to the overall strength of the medical biology sector. On the same day, the innovative drug concept rallied across the board; InnoStar and several related stocks including Mehao Medical, BETTERMED, Chengdu TargetRx, Hotgen Biotech, Rongchang Biotech, and Sanbo Brain Hospital hit the daily limit or rose over 10%[3][4], reflecting the market’s high attention to the medical biology sector.

From a capital perspective, InnoStar stood out in the cellular immunotherapy concept, recording an institutional capital net inflow of 3.9587 million yuan and ranking among the top in stocks under the same concept[2]. Although institutional capital saw a net outflow of 5.7688 million yuan on January 6, the net inflow on January 5 and a turnover rate of 2.58% indicate intense capital rivalry, with clear divergence between bullish and bearish positions on the stock[6].

InnoStar has made breakthrough progress in several important projects it participated in recently, providing it with substantial fundamental support. Entrusted by Borui Chuanghe, the company provided comprehensive non-clinical safety evaluation and pharmacokinetic research for “¹⁷⁷Lu-BRP-010030 Injection”, helping it obtain the implied approval for clinical trials from the National Medical Products Administration (NMPA)[5]. It is worth noting that this product is the world’s only approved therapeutic radiopharmaceutical based on targeted covalent technology, used to treat advanced solid tumors positive for fibroblast activation protein (FAP), representing a major innovation in the field of radiopharmaceuticals. In addition, InnoStar also assisted Grand Pharmaceutical’s independently developed blockbuster global innovative RDC drug in obtaining FDA approval[5], further verifying its technical strength and project delivery capability in the industry.

The CXO (pharmaceutical R&D outsourcing) industry as a whole is showing a recovery trend, providing industry background support for InnoStar’s strong performance. According to research from HuaAn Securities, the revenue of the pharmaceutical R&D outsourcing sector increased by 12.23% year-on-year in 2025, and the net profit attributable to parent company surged by 56.96% year-on-year[7], with profitability improving significantly. The demand side of downstream customers has picked up, the pressure on order prices has eased, drugs such as peptides and ADCs have driven demand improvement, and positive changes have appeared in orders and performance of upstream life science enterprises[8]. This industry trend indicates that the sub-sector where InnoStar is located is experiencing fundamental improvement, providing macro background support for its mid-term performance.

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Although InnoStar’s current financial data is under pressure, the leading indicator of contract liabilities shows positive changes. The company’s contract liabilities reached 534 million yuan in the first three quarters of 2025, an increase of 6% year-on-year and 20% compared to the full year of 2024[7]. Contract liabilities are an important leading indicator for measuring the future revenue growth potential of CRO enterprises; their continuous growth indicates that the company’s order backlog is improving, providing potential support for future revenue growth. This data provides certain fundamental logical support for the current concept-driven market.

From the technical trend perspective, InnoStar’s recent performance shows obvious characteristics of oversold rebound. It recorded a weekly increase of 6.43% on January 5, a 10.38% increase in the past 5 days, and a 15% increase this month[7], with an overall trend outperforming most pharmaceutical stocks. The stock recorded a weekly increase of 15% from December 8 to 12, 2025, once leading the gains in pharmaceutical sector stocks[7], showing its high sensitivity to sector rotation. This oversold rebound nature means that the current rally is more driven by valuation recovery rather than a reflection of fundamental reversal.

InnoStar involves multiple popular concepts, including innovative drugs, cellular immunotherapy, CRO/pharmaceutical R&D outsourcing, radiopharmaceuticals (RDC), targeted covalent technology, etc. The overlay of multiple concepts makes it easier to attract the attention of market hot money and gain capital favor in sector rotation markets. The successful cases of world-first drug projects are scarce, which helps enhance the company’s brand awareness and competitive position in the industry.

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: InnoStar’s financial data in the first three quarters of 2025 is obviously under pressure. Operating revenue was 571 million yuan, a year-on-year decrease of 35.33%; net profit attributable to parent company was -14.7881 million yuan, a year-on-year decrease of 111.14%; non-recurring net profit was -34.7594 million yuan, a year-on-year decrease of 128.8%[7]. The situation in the third quarter is also severe: Q3 net profit attributable to parent company was only 0.4015 million yuan, a year-on-year decrease of 98.92%, and non-recurring net profit was -2.2028 million yuan, a year-on-year decrease of 107.06%. The profitability of the company’s main business is deteriorating rapidly, and no obvious inflection point of fundamental improvement has appeared yet.

: Pharmaceutical stocks on the STAR Market generally have high valuations, and InnoStar has seen a large short-term increase (15% this month), creating a demand for technical pullback. The frequent in and out of institutional capital indicates obvious short-term trading characteristics, and investors need to be wary of the risk of chasing highs.

: The CRO industry is highly competitive, with continuous pressure from product homogenization. Against the background of industry recovery, various enterprises are competing for limited order resources, and the company faces great competitive pressure.

: The prosperity of the CXO industry is recovering, and the growth in contract liabilities indicates potential improvement in future revenue. If the industry recovery trend continues, InnoStar is expected to benefit from the overall beta market.

: The successful cases of world-first drug projects prove the company’s technical strength and project delivery capability, helping to enhance its reputation and competitiveness in the industry. Although such projects are difficult to contribute significant revenue in the short term, they are of great significance for brand value enhancement in the long run.

: The rotation market of the medical biology sector is expected to continue, and concepts such as innovative drugs and cellular immunotherapy continue to receive market attention; as a concept stock, InnoStar is expected to receive continuous capital attention.

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InnoStar entered the Strong Stock Pool today, mainly driven by the dual positive factors of the overall strength of the medical biology sector and the approval of the world-first drug project the company participated in[1][5]. In nature, this rally is a concept-driven valuation recovery rather than a fundamental reversal. The current stock price performance is dominated by capital sentiment and sector rotation, and fundamental improvement remains to be verified.

: Short-term (1-2 weeks) performance depends on sector sentiment and capital relay, and may maintain strong consolidation; mid-term (1-3 months) requires observation of the company’s order acquisition and performance improvement; if contract liabilities are successfully converted into revenue, the rebound market is expected to continue; in the long run, the successful cases of world-first drug projects help enhance the company’s brand and industry status, but the actual performance contribution still takes time to verify.

: This stock involves multiple risk factors, including performance decline, large short-term increase, intense capital rivalry, etc. It is recommended that investors pay attention to the sustainability of the sector and the improvement of the company’s fundamentals, avoid blindly chasing highs, wait for a pullback to accumulate positions at low prices, and set stop-loss levels to control risks.

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[0] Jinling Analysis Database (Internal Quantitative Analysis Data)

[1] Stockstar Live - InnoStar Rises Over 10%

[2] Eastmoney - Capital Flow of Cellular Immunotherapy Concept

[3] The Paper - Three Major A-Share Indices Close Higher in Volatile Trading

[4] CNNB - Medical Biology Sector Strong Throughout the Day

[5] Eastmoney Wealth Account - InnoStar Assists Borui Chuanghe

[6] Stockstar - Analysis of Institutional Capital for InnoStar

[7] HuaAn Securities - Pharmaceutical Sector Gradually Forms a Bottom PDF

[8] Sina Finance - 2026 Annual Investment Strategy for Medical Biology Industry