Company Profile

Amethystum Storage Technology Co., Ltd. is located in Meizhou, Guangdong, China and is part of the Magnetic & Optical Media Manufacturing Industry. Amethystum Storage Technology Co., Ltd. has 173 total employees across all of its locations. There are 3 companies in the Amethystum Storage Technology Co., Ltd. corporate family.

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As a leading manufacturer of optical storage services, its earnings maintain high growth.

As a leading manufacturer of optical storage services, Amethystum Storage Technology （the company）’s main products include optical storage medium for consumers and optical storage devices and solutions for enterprises.

The company’s CAGR of revenue and net profit attributable to shareholders was 46.5% and 42.04%, respectively. The company is expected to realize revenue in 2019 of CNY 489mn-CNY 597mn, up 21.69%-48.74% YoY; its net profit attributable to shareholders is expected to came in at CNY 138nm-CNY 169mn, an increase of 31.39%-60.59% from a year earlier.

The demand for hot and cold tiered storage brings about prosperity and the company takes the lead in technology.

Based on the forecast of IDC, China’s data ecosphere will increase to 48.6ZB by 2025, becoming the biggest data ecosphere in the world, and the CAGR during 2018-2025 will achieve 30.35%.

At present, the demand for hot and cold tiered storage is increasing; being secure and reliable as well as energy-saving, blue-ray storage has an obvious strength in cold data storage and a huge market potential.

The company owns advanced blue-ray storage technologies and was selected, as the only enterprise manufacturing upstream materials and production equipment of optical storage as well as operating optical storage business, by Ministry of Industry and Information Technology （MIIT） into “A Conglomerative Service Provider in Storage in 2018 Strengthen Industrial Base Project”。 It is also the only optical storage company on the Chinese mainland whose BD-R underlying coding strategy has got certification from international blue-ray alliance, one out of nine on the globe.

100G BD-R is to put into production and the company is actively expand businesses in new technologies.

The company is expected to make progress in three aspects, boosting its earnings growth. 1） 100G BD-R is expected to put into production in 2020, greatly improving its competitiveness; 2） as optical storage solution schemes enjoy a high growth, whether in amount of single project or in the number of projects, it contributed over 80% to the revenue in 2018; 3） the company maintains input in such new technologies as cloud storage and holographic storage.

Earnings forecast and investment recommendation

The company is estimated to realize its EPS of CNY 1.11/CNY 1.66/CNY 2.47 for year 2019/2020/2021.Given its competitiveness and growth, we initiate our coverage with “Outperform” rating.

Potential risks: less-than-expected earnings; less-than-expected output of 100G BD-R; slower-than-expected R&D of holographic storage