Starry(SH:603520) Ping An Securities·2024-05-05 02:00Investment Rating - The report maintains a "Recommended" rating for the company, indicating an expectation of strong performance relative to the market over the next six months [6][14][21]. Core Insights - The company has shown a significant improvement in performance, with a notable turnaround in net profit for 2023, achieving a net profit of 0.44 billion yuan, a year-on-year increase of 158.3% [9][10]. - The decline in iodine prices is expected to enhance profit margins, with the average import price of iodine dropping from 71.45 USD/kg in February 2023 to 64.55 USD/kg in March 2024, indicating a trend that could stabilize at 30-40 USD/kg [10]. - The company is positioned at a critical operational inflection point, with expectations for continued revenue growth driven by both domestic and international sales of APIs and formulations [14][11]. Financial Performance Summary - Revenue and Profit Forecasts: - 2023 revenue reached 2.196 billion yuan, a 3.04% increase from the previous year, with projections for 2024 and beyond showing substantial growth [9][7]. - Net profit is expected to grow significantly, with forecasts of 0.154 billion yuan in 2024 and 0.626 billion yuan in 2026, reflecting a robust recovery trajectory [14][18]. - Key Financial Metrics: - The gross margin is projected to improve from 24.3% in 2023 to 35.9% by 2026, indicating enhanced profitability [18]. - The return on equity (ROE) is expected to rise from 2.5% in 2023 to 20.5% in 2026, showcasing improved efficiency in generating profits from equity [18]. - Market Position: - The company holds the largest number of iodine contrast agent formulations in China, with domestic sales reaching 4.9 billion yuan and a compound annual growth rate (CAGR) of 54% over the past three years [11]. - The company is actively pursuing EU-GMP certification to enhance its international market presence, which could lead to accelerated growth in overseas sales [11][14].