| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 16.54 | 56 |
| Intrinsic value (DCF) | 5.32 | -50 |
| Graham-Dodd Method | 0.13 | -99 |
| Graham Formula | n/a |
Zhejiang Starry Pharmaceutical Co., Ltd. is a specialized Chinese pharmaceutical manufacturer with a strategic focus on two key therapeutic areas: X-ray computed tomography (X-CT) non-ionic contrast agents and fluoroquinolone antibiotics. Founded in 1997 and headquartered in Xianju, China, the company operates across the entire pharmaceutical value chain, from research and development to production and global sales. Its core contrast agent portfolio includes established products like iohexol, ioversol, and iopamidol, which are essential for medical imaging diagnostics. In the anti-infective segment, Starry Pharmaceutical produces critical fluoroquinolones such as levofloxacin and pazufloxacin. As a player in China's rapidly growing healthcare sector, the company serves both domestic and international markets, positioning itself at the intersection of diagnostic medicine and essential generic pharmaceuticals. With China's aging population and increasing healthcare expenditure driving demand for both diagnostic imaging and antibiotics, Starry Pharmaceutical's specialized manufacturing capabilities and vertical integration provide a solid foundation in the competitive generic drug market. The company's dual focus on contrast media and antibiotics creates diversification within the broader pharmaceutical manufacturing industry.
Zhejiang Starry Pharmaceutical presents a mixed investment profile for FY 2024. The company reported revenue of CNY 2.35 billion but recorded a net loss of CNY 49.1 million, with negative diluted EPS of CNY -0.12, indicating profitability challenges. Positive operating cash flow of CNY 193.5 million suggests core operations are generating cash, but significant capital expenditures of CNY -480.6 million reflect substantial ongoing investments in capacity or R&D. The company maintains a dividend payment of CNY 0.15 per share despite the net loss, which may appeal to income-focused investors but raises questions about sustainability. With a market capitalization of approximately CNY 5.45 billion and a beta of 0.611, the stock demonstrates lower volatility than the broader market. The high debt level of CNY 1.98 billion against cash reserves of CNY 603.4 million warrants careful monitoring of leverage. Investors should weigh the company's established market position in specialized generics against its current profitability challenges and substantial debt load.
Zhejiang Starry Pharmaceutical competes in the specialized generic pharmaceutical market with a unique dual focus on contrast agents and fluoroquinolone antibiotics. The company's competitive positioning is defined by its vertical integration in these niche segments, controlling production from intermediates to finished dosage forms. In the contrast media market, Starry benefits from technical barriers to entry due to the complex manufacturing processes required for non-ionic contrast agents, giving it an advantage over generic manufacturers without specialized expertise. However, the company faces intense competition from larger domestic players like Hengrui Medicine and international giants like Bayer and GE Healthcare that dominate the premium contrast agent segment globally. In fluoroquinolones, Starry competes in a highly fragmented generic antibiotic market where scale and cost efficiency are critical. The company's relatively smaller size compared to pharmaceutical giants limits its R&D budget for innovative drugs, constraining it primarily to generic and mature products. Its geographical focus on China provides domestic market advantages but limits global diversification. The significant capital expenditures suggest ongoing investments to maintain competitive manufacturing capabilities, but the net loss indicates margin pressure from competition. Starry's competitive advantage lies in its specialized technical expertise in contrast media manufacturing rather than scale or brand power, making it vulnerable to pricing pressure from larger competitors with greater economies of scale.