Starry(SH:603520) HTSC·2025-05-05 15:45Investment Rating - The investment rating for the company is maintained at "Accumulate" with a target price of 9.29 RMB [6][7]. Core Views - The company reported a revenue of 2.35 billion RMB for 2024, representing a year-on-year increase of 7.02%, but a net loss attributable to shareholders of 49.10 million RMB, a decline of 211.00% year-on-year. The decline in profit is primarily due to increased depreciation from new production capacity and higher sales expenses [1]. - The company’s gross margin for 2024 is projected at 19.4%, down 4.9 percentage points, mainly due to rising costs from upstream commodity price increases. If iodine prices decline and the company's technological upgrades yield results, gross margins are expected to improve in 2025 [2]. - The company’s imaging agent raw materials are expected to generate revenue of approximately 1.2 billion RMB in 2024, with an estimated API shipment volume of 1,500 tons, up from over 1,200 tons in 2023. By the end of 2025, the production capacity is anticipated to reach 3,000 tons [3]. - The imaging agent formulations are expected to see revenue growth of over 10% in 2025, driven by domestic procurement policies and accelerated overseas registrations. The domestic formulation revenue for 2024 is estimated at 5.58 billion RMB, a year-on-year increase of 13.75% [4]. Summary by Sections Financial Performance - In 2024, the company achieved a revenue of 2.35 billion RMB, with a year-on-year growth of 7.02%. The net profit attributable to shareholders was a loss of 49.10 million RMB, a significant decline from the previous year [1]. - The first quarter of 2025 showed a revenue of 686 million RMB, a year-on-year increase of 6.79%, with a net profit of 14.34 million RMB, up 16.79% year-on-year [1]. Gross Margin and Cost Analysis - The gross margin for 2024 is expected to be 19.4%, down from the previous year, primarily due to increased costs from raw materials. The iodine price remained high at 64-70 USD/kg in 2024 compared to 30-35 USD/kg in 2021. A potential decline in iodine prices could lead to an improvement in gross margins in 2025 [2]. Production Capacity and Market Expansion - The company is expanding its production capacity for imaging agents, with an expected increase in API shipment volumes to 2,000 tons by the end of 2025. The production capacity for raw materials is projected to reach 3,000 tons by the end of 2025 [3]. - The domestic imaging agent formulations are expected to grow significantly, with a revenue forecast of over 10% growth in 2025, supported by successful bids in procurement policies across various regions [4]. Profit Forecast and Valuation - The profit forecast for 2025 has been adjusted to a net profit of 131.36 million RMB, reflecting a 367.53% increase year-on-year. The target price is set at 9.29 RMB, based on a 31x PE ratio for 2025 [5].