Strategic pattern: Optical storage solutions have become the pillar business, and profitability has greatly increased. The company once became a leader in domestic optical storage media and equipment suppliers with independent Blu-ray disc production technology. Since 2016, the company has begun to transition to the role of a provider of optical storage solutions, and has received many important government and enterprise orders for green data center applications and industry applications. At present, the company has successfully formed a business structure centered on optical storage solutions and supplemented by optical storage media and equipment. Benefiting from this strategy, the company's profitability has increased dramatically. In 2018, the company's revenue growth rate was 28.34%, while net profit growth rate was as high as 95.63%. Technology trends: Independent intellectual property holders, about to start a 100G optical disc production line. The company is the only optical storage enterprise in mainland China that has passed the BD-R low-level coding strategy certification by the International Blue Light Alliance. It is also an optical storage medium and equipment manufacturer selected by the Ministry of Industry and Information Technology for its “Industrial Strong Infrastructure Project”. The company has mastered the production capacity of 25G Blu-ray discs, but since the production capacity gap with Japanese companies is still huge, it is still investing heavily in scientific research, and its annual investment remains stable at around 7% of operating income. The company began ordering a 100G Blu-ray disc production line in 2017, and is expected to complete delivery in 2020. At that time, the company's international competitiveness will take a big leap forward. Market potential: Ushering in the opportunity for “new infrastructure” to build data centers, the future market for cold data storage has revealed that at least 320 data centers are being planned to be built across the country. However, this year the Politburo Standing Committee re-proposed “new infrastructure” and called for speeding up the progress of data center construction, making data centers gain greater national strategic importance. However, the long-term storage requirements of data centers for large-scale cold data will provide a rare opportunity for the development of low energy consumption and low cost optical storage. China is expected to become the world's largest data circle by 2025. The rich experience accumulated during the company's transformation in the green data center market will give it an advantage in future data center order competition. Company profit and investment ratings: The company is a leading optical storage technology enterprise company in China, and is optimistic about the company's storage business development. We expect the company to achieve net profit of 1.36/1.82/255 million yuan in 2019-2021, corresponding to EPS of 0.95/0.96/1.34 yuan, respectively, and the current stock price corresponding to the PE value in 2019-2021 is 71/53/38 times, respectively. Give a “Recommended” rating. Risk warning: Production line construction falls short of expectations, risk of technological change substitution, risk of uncertainty in macroeconomic development.