occurrences
The company released its report for the first quarter of 2020 on Tuesday, April 28, 2020. During the reporting period, the company achieved operating income of 102 million yuan, an increase of 145.36% over the previous year, and the net profit of the mother reached 16 million yuan, an increase of 559.89% over the previous year.
The Blu-ray storage model was promoted smoothly, and the company's Q1 performance grew rapidly. The company actively exploited the application of optical storage in data centers and various industries along the “media-device-solution” with accumulated low-level core technology and competitive advantages throughout the industry chain. In Q1 2020, the company achieved revenue of 102 million yuan, an increase of 145.36% over the previous year. At the same time, the company's optical storage equipment inventory also increased 250% year-on-year in 2019, reflecting strong downstream demand for optical storage and laying the foundation for the company's high growth throughout the year.
Continuing to increase investment in R&D, several research projects to build future growth engines The company spent 7.2016 million yuan on R&D in Q1 2020, an increase of 102.97% over the previous year. It is expected that R&D expenses will continue to grow rapidly throughout the year. The company will develop a series of benchmark projects, such as a big data secure cloud storage technology project, an amethyst green cloud storage center project, a holographic optical storage technology research and development project, and a magneto-optoelectronic integrated storage system R&D project, to create a new growth engine for the company's long-term development.
Q2 won a large order from the government. The new business cooperation model is worth looking forward to. On April 9, 2020, the company won the bid for a single-source optical storage device order for the Inner Mongolia Government Cloud Big Data Disaster Recovery Center Project. The order amount reached 82,536,600 yuan. The main company of this project, Inner Mongolia Zhonghong Amethyst Technology, was formed in a joint venture between the company and local government platforms. We believe that the joint venture between the company and local government platforms to establish the project company's business model will help further promote optical storage applications in the field of government disaster recovery. Relying on the new business cooperation model, the company has already won large orders in Q2, and the annual growth is even more worth looking forward to.
Investment advice
The company independently innovates with underlying technology and is a scarce optical storage target. It maintains the company's profit forecast, predicts that the company will achieve operating income of 726/10.05/1,383 million yuan and net profit of 1999/275/374 million yuan in 20-22, maintaining the “increase in holdings” rating.
Risk warning: risk of macroeconomic fluctuations; risk of increased competition; risk of technology leakage; risk of storage promotion falling short of expectations.
