Co-creation data: Focus on storage and the Internet of Things, and revenue and profit continue to grow. Co-Creation Data was founded in 2005. The company is mainly engaged in R&D, production and sales of products such as data storage devices and IoT smart terminals. The company was listed on the Shenzhen Stock Exchange GEM in 2020. As of the first half of 2023, the company has established long-term and stable cooperative relationships with well-known technology companies such as Lenovo Group, Anke Innovation, Xiaomi Ecological Chain Enterprise (Chuangmi Technology), China Mobile Group (subsidiary company), 360 Group, NetEase Youdao, Ring (US), Noise (India), 3-Plus (US), LG (South Korea), Buffalo (Japan), and Woan, as well as well-known domestic e-commerce businesses. According to the company's 2023 performance forecast, the company is expected to achieve net profit of 275-310 million yuan in 2023, an increase of 110.07%-136.81% over the previous year.

The storage industry has vast space, and the company is expected to benefit deeply. According to iResearch's forecast, China's enterprise solid-state drive market will be 21.7 billion yuan in 2021, and the domestic enterprise solid-state drive market will increase to 66.9 billion yuan by 2026. The company is deeply involved in the storage sector. The revenue of data storage equipment increased from 621 million yuan in 2019 to 1,694 million yuan in 2022, accounting for a revenue ratio of 39.91% in 2019 to 53.81% in 2022. Meanwhile, according to the company's 2021 annual report, Lenovo Group is the company's largest customer, with corresponding revenue of 1,529 billion yuan, accounting for 51.67% of that year's revenue. The company is expected to benefit from high-quality customers, and self-developed chips are expected to guarantee the company's long-term growth.

The IoT business continues to expand. According to IOT Analytics data, the number of global IoT device connections reached 11.3 billion in 2020, an increase of 13% over the previous year; the number of global connections is expected to reach 27.1 billion by 2025.

According to data from relevant consulting agencies, industry segments such as consumer-grade smart hardware, wearable devices, and security camera industries have broad market space. The company's IoT business includes IoT smart terminals, smart wearable terminals, and smart cleaning products. The company has advantages in technical reserves, quick response, manufacturing, and customer resources.

The server business provides a new growth curve. According to IDC data, global server shipments in 2022 exceeded 15.17 million units, up 12% year over year, with an output value of US$121.58 billion. In 2023, China's server shipments are expected to reach 4.49 million units, up 3.43% year on year; China's server market is expected to reach US$30.8 billion, up 12.66% year on year. The company's layout of the server recycling business is expected to provide long-term growth impetus.

Performance forecasting, valuation and ratings: Co-creation data focuses on storage and the Internet of Things, and has broad room for growth. We forecast the company's revenue for 2023-2025 to be 41.39/5376/6.508 billion yuan, and net profit to mother for 2023-2025 will be 2.7/4.31/522 million yuan, corresponding to PE 43/28/23X. We believe that the company is deeply involved in the storage sector and has sufficient long-term growth momentum. The company has benefited from high-quality customers and the wave of AI, and was given a “buy” rating for the first time.

Risk warning: risk of technology renewal; risk of high customer concentration; risk of fluctuating raw material prices.