Core views
The explosive growth of data, as well as the tiered storage of hot and cold data, has provided a broad industry space for Blu-ray storage.
80% of data will become “cold” data with low access. With the advent of the era of data intelligence, the long-term storage cost problem of massive data generated by many smart terminals began to appear. According to IDC's forecast, the Chinese data ring will become the largest data circle in the world in 2025. Cold data storage mainly considers long-term low cost and stability, and Blu-ray storage has comparative advantages in these two points, so it is an important choice for cold data storage. Since “hot” data requires a faster response time and is naturally converted to cold data, hybrid opto-magnetic storage has become an important development trend. Magnetic storage corresponds to “hot” data, and optical storage corresponds to “cold data”. This trend provides broad development space for the Blu-ray storage industry.
The company focuses on the field of Blu-ray storage, and its product technology has been recognized by the mainstream. Since its establishment, Amethyst Storage has focused on the development and production of Blu-ray series products. It was selected by the Ministry of Industry and Information Technology in the “2018 Industrial Strong Engineering Memory One-Stop”. It is also the only mainland enterprise whose BD-R low-level coding strategy has been certified by the International Blu-ray Alliance. The company signed a strategic cooperation agreement with the Great Wall of China to cooperate in projects, technology, development, etc. Amethyst's archival data filing solution has been selected as one of the top ten solutions for intelligent construction of smart courts in politics and law in the country. We believe that as the company continues to deepen its cultivation in the field of Blu-ray storage, the company's brand and technical influence are expected to increase.
The company's products cover the entire Blu-ray storage industry chain, and the core technology is independently developed. The company's products are optical storage equipment products and solutions, covering the entire Blu-ray storage technology industry chain. The company's main core technology focuses on self-development, and everything from media to equipment can be designed and produced by itself. The company's products are positioned in the enterprise-level storage market, and the main revenue also comes from enterprise-level users. We believe that with the development of the digital economy and the increasing recognition of Blu-ray storage technology, the company's business space in the enterprise market is expected to be further released.
Financial forecasting and investment advice
We forecast the company's EPS for 2020-2022 to be 0.94, 1.31, and 1.61 yuan respectively. We selected companies in the storage, hardware, and IDC fields as comparable companies. According to the valuation level of comparable companies, our company's reasonable valuation in 2021 was 37 times the price-earnings ratio, corresponding to the target price of 48.47 yuan in 2021, giving a purchase rating for the first time.
Risk warning
5G construction falls short of expectations; Blu-ray storage penetration falls short of expectations; industry competition intensifies; R&D falls short of expectations
