Starry(SH:603520) Huachuang Securities·2025-05-21 00:15Investment Rating - The report maintains a "Strong Buy" rating for the company [1][11]. Core Views - The company is a leading enterprise in the highly scarce contrast agent industry, poised to enter a new phase of rapid growth [2]. - The iodine contrast agent sector is characterized by a large market size, long-term growth potential, high entry barriers, and few global players, making it an excellent investment opportunity [10]. - The company has strengthened its competitive position through strategic capacity investments and is expected to benefit from scale effects and product upgrades in the coming years [10][18]. Summary by Sections Section 1: Scarcity in the Contrast Agent Industry - The company has over 20 years of experience in the contrast agent field and is the largest producer of iodine contrast agent raw materials in China [15]. - From 2018 to 2024, the company's revenue compound annual growth rate (CAGR) reached 17.6%, indicating robust growth [15]. - The company has established a comprehensive layout across the entire contrast agent industry chain, enhancing its core competitiveness [15]. Section 2: Iodine Contrast Agent Raw Materials - The company is expected to achieve revenue of 1.226 billion yuan from iodine contrast agent raw materials and intermediates in 2024, maintaining a stable contribution to overall revenue [27]. - New production capacities from the company's three major production bases are gradually being realized, which will lead to increased revenue and gross margins in the iodine contrast agent segment [27][28]. Section 3: Formulations and Global Strategy - The domestic formulation business is projected to generate revenue of 558 million yuan in 2024, with a year-on-year growth of 13.75% [42]. - The company has successfully won bids for three major iodine contrast agent formulations, positioning itself advantageously in the domestic market [46]. - The overseas formulation business, particularly through the Ireland IMAX platform, is expected to see significant revenue and profit growth [47]. Financial Projections - The company is projected to achieve net profits of 96 million yuan, 245 million yuan, and 360 million yuan for the years 2025, 2026, and 2027, respectively, indicating a turnaround from losses [3][11]. - The current stock price corresponds to price-to-earnings (PE) ratios of 42, 17, and 11 for the years 2025, 2026, and 2027, respectively [11].