Dongcheng Biochem(002675) 东吴证券·2025-03-10 00:03Investment Rating - The report assigns an initial "Buy" rating for the company [1]. Core Views - The company is entering a harvest period for its nuclear medicine platform, with stable revenue contributions expected from its core heparin business starting in 2025 [7]. - The nuclear medicine industry is experiencing demand expansion, with a stable duopoly supply structure, and the company is well-positioned to benefit from this growth [7]. - The company has a comprehensive supply network in the nuclear medicine sector, which enhances its competitive advantage compared to international peers [7]. - The company’s innovative nuclear medicine pipeline is expected to yield commercial returns in the near future, with several products in advanced clinical stages [7]. - The financial forecast indicates a recovery in revenue and profit from 2025 onwards, driven by the commercialization of new nuclear medicine products [7]. Summary by Sections 1. Company Overview - The company is a leading innovator in nuclear medicine research and production, with a comprehensive business model covering raw materials, formulations, nuclear medicine, and health products [14]. 2. Nuclear Medicine Industry - The nuclear medicine market is characterized by high entry barriers and strong growth potential, primarily used for imaging diagnostics and tumor treatment [31]. - The global nuclear medicine market is projected to grow at a CAGR of 11.5% from 2024 to 2033, with significant opportunities in China, where the market is expected to grow at a CAGR of 32.4% from 2021 to 2025 [7]. 3. Company’s Nuclear Medicine Pipeline - The company has a robust pipeline of nuclear medicine products, with several candidates in late-stage clinical trials, including treatments for prostate cancer and other malignancies [7]. - The company’s nuclear medicine segment achieved revenue of 1.01 billion yuan in 2024, with a gross margin of 69.1%, indicating strong profitability in this area [22]. 4. Financial Projections - Revenue projections for 2025-2027 are 32.2 billion yuan, 37.1 billion yuan, and 41.9 billion yuan, respectively, with corresponding net profits of 2.2 billion yuan, 3.2 billion yuan, and 4.0 billion yuan [7]. - The current P/E ratios for the company are projected to be 50, 34, and 27 for the years 2025, 2026, and 2027, respectively, suggesting potential undervaluation given the expected growth [7].