People's Tongtai (600829) Limit-Up Analysis: Sentiment-Driven vs. Fundamental Divergence

People’s Tongtai (600829) hit the daily limit for 5 consecutive trading days from November 10 to 14, 2025, with a cumulative increase of 61.13%, far exceeding the 0.18% decline of the Shanghai Composite Index and the 5.66% increase of the pharmaceutical commerce sector in the same period [0]. Its share price rose rapidly from 9.20 yuan to 15.13 yuan, becoming a hot stock in the market [0].

People’s Tongtai is a pharmaceutical circulation enterprise under Harbin Pharmaceutical Group, with main businesses of pharmaceutical wholesale and retail [0]. In recent years, the company has continuously optimized its business strategy, deepened collaboration with upstream suppliers,争取 new product authorization and distribution rights for volume-based procurement and national negotiation varieties, and promoted the penetration of key varieties in medical institutions, primary markets and retail terminals relying on the wholesale-retail integration channel advantage [0]. In 2025, the company’s R&D investment increased by more than 16% year-on-year, with 7 new patents added during the year, and its technological attributes have been enhanced [0].

1. Favorable Policy Environment
   : The pharmaceutical sector received continuous policy support in 2025, and the prosperity of sub-sectors such as innovative drugs and traditional Chinese medicine increased, providing a good policy background for pharmaceutical commerce concept stocks [0].

2. Capital Chasing Effect
   : The chasing of pharmaceutical commerce concept stocks by market capital is one of the main driving factors [0]. Continuous limit-ups have attracted more attention, forming a self-reinforcing capital inflow effect.

3. Performance Improvement Expectation
   : The performance improvement expectation brought by the company’s business strategy optimization, as well as the synergistic effect relying on the background of Harbin Pharmaceutical Group, provided investors with imagination space [0].

The company has issued an announcement admitting that its stock price has seriously deviated from fundamentals and there is a risk of irrational speculation [0]. This short-term rapid rise is mainly driven by sentiment, which has a large deviation from the company’s actual operating conditions.

The current stock price trend shows typical sentiment-driven characteristics, and technical indicators show overbought signals, but the improvement of the company’s fundamentals is difficult to support such a high valuation level. This divergence has often indicated a large correction risk in history.

The rotation effect of the pharmaceutical sector under favorable policies is obvious. Capital has shifted from sub-sectors such as innovative drugs that have risen sharply in the early stage to relatively lagging pharmaceutical commerce stocks, but this rotation is often short-term.

The FOMO (Fear of Missing Out) psychology generated by continuous limit-ups has further amplified irrational investment behaviors, and the sentiment of investors chasing ups and downs is difficult to cool down quickly in the short term.

1. Valuation Regression Risk
   : The stock price seriously deviates from fundamentals, and there is a technical need for a sharp correction
2. Regulatory Attention Risk
   : Abnormal fluctuations may attract regulatory attention and inquiries
3. Liquidity Risk
   : Once the limit-up is lifted after continuous limit-ups, a large number of selling pressures may appear
4. Sentiment Reversal Risk
   : Once the market sentiment turns, it may trigger a panic selling decline

1. Policy Dividend Period
   : Policy support for the pharmaceutical industry is still continuing, and the industry prosperity remains high
2. Operational Improvement
   : The company’s fundamentals are indeed gradually improving, and long-term value is worth paying attention to
3. Industry Integration
   : The concentration of the pharmaceutical circulation industry is increasing, and leading enterprises are expected to benefit

In the short term (1-2 weeks), it faces greater adjustment pressure; in the medium term (3-6 months), it is necessary to observe whether the company’s performance can meet market expectations; in the long term (more than 1 year), it depends on the industry policy environment and the sustainability of the company’s operational improvement.

Based on comprehensive analysis, People’s Tongtai’s current limit-up market is mainly driven by market sentiment and capital, with obvious speculation characteristics. Although the company’s fundamentals have improved, it is difficult to support the current valuation level. Investors should be alert to short-term correction risks and rationally evaluate the company’s long-term investment value. The policy dividends of the pharmaceutical industry and the company’s operational improvement provide certain support for long-term investment, but the risk of short-term volatility is significant and needs to be treated with caution.