KSTAR(SZ:002518) Huaxin Securities·2025-08-21 09:41Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [8]. Core Insights - The company's data center business is performing well, with a positive outlook for the HVDC and liquid cooling technologies. The product matrix includes UPS, precision air conditioning, micro-modules, power modules, and battery systems, serving key industries such as finance, communication, and healthcare [5]. - The storage business is gradually recovering, with a focus on expanding into new markets, particularly in Europe, the Asia-Pacific, and Africa. The European market is showing signs of recovery after a competitive phase [7]. - Revenue forecasts for 2025-2027 are projected at 48.21 billion, 65.20 billion, and 82.15 billion yuan, respectively, with corresponding EPS of 0.96, 1.39, and 1.87 yuan. The current stock price corresponds to PE ratios of 33.7, 23.2, and 17.3 times for the respective years [8]. Summary by Sections Data Center Business - The company has a strong presence in data center infrastructure, with domestic and overseas revenues evenly split. The data center revenue growth has improved in Q1 2025 and is expected to maintain high levels throughout the year [5]. Storage Business - The storage business is recovering, particularly in Europe, and the company is actively exploring new market channels in emerging regions such as the Middle East and Southeast Asia [7]. Financial Projections - The company anticipates a revenue increase from 4.82 billion yuan in 2025 to 8.22 billion yuan in 2027, with a significant recovery in net profit from 559 million yuan in 2025 to 1.09 billion yuan in 2027 [11].