What is the uniqueness of Amethystum compared with the benchmark of E-Hualu and Tongyou Technology?(1)
There are many“invisible champions” companies in subdivided fields among the companies listed in the Science and Technology Board. How to find true“invisible champions”is a key link in the future layout for investors. Guangdong Amethyst Information Storage Technology Co., Ltd. (hereinafter referred to as "Amethyst Storage") is planned to be registered in the Science and Technology Board, which takes a leading position in optical storage technology. Its pre-disclosure prospectus (hereinafter referred to as "the prospectus") claims the uniqueness of a number of businesses.
Amethyst Storage explained that its target companies are Tongyou Technology（300302.SZ）and E-Hualu（300212.SZ）which is a subsidiary of a central enterprise and a listed company with strong financial strength and market development resources.
How valuable is the "uniqueness" of the business worth?
It is a key link how to identify the gold content of these "hidden champions" enterprises in the board of science and technology in the future layout for investors. The repeated emphasis on the "unique" and "pioneer" of certain business is a typical feature of this Amethyst Storage prospectus.
In 2018, Amethyst Storage achieved operating income of CNY 402 million, a year-on-year increase of 28.34%; net profit of CNY 105 million year-on-year growths of 95.63%. The proposed public offering of shares does not exceed 4,759.61 million shares and finances CNY 1.2 billion, mainly invested in the big data security cloud storage technology project, Amethyst green cloud storage center project, holographic optical storage technology research and development project and independent controllable magnetic and optical integrated storage System development project.
Amethyst Storage said, "The issuer is the leading Optical Storage Technology Enterprise in China, which is facing the application requirements of the hybrid storage of magneto-optical electricity in the context of tiered storage of hot and cold data in the big data era, as well as the need for autonomous control and data storage security improvement in government, military and other fields. It produces optical storage media, optical storage equipment and offer research development, design, development, production, sales and service of intelligent hierarchical storage of data and information technology solutions based on optical storage technology.”
The issuer is the only optical storage upstream material, production equipment manufacturing and optical storage manufacturing enterprise selected by the Ministry of Industry and Information Technology, "One of the industrial strong base engineering storage in 2018"; it is the only BD-R (one-time recording Blu-ray Disc) underlying encoding strategy through the international Blu-ray Alliance-certified light storage companies in the mainland (only nine in the world). The overall technology of the Blu-ray data storage system has reached the international advanced level. It has a national-level “Blu-ray Detection Laboratory” and “Guangdong Blu-ray Storage Engineering Technology Center”. It has obtained 5 invention patents and 55 software copyrights, and participated in 8 countries and industries. The establishment of local standards, and is participating in the formulation of the national standard for the "General Specification for Magneto-optical Hybrid Storage Systems", is a pioneer in the development of large-capacity independent technology Blu-ray storage in China.
Transition from consumer-level market to enterprise-level market
For Amethyst Storage, the success of the transition from the consumer market to the enterprise market is the key to its future growth. “With the penetration of mobile Internet technology, consumer demand has generally declined, and with the development of enterprise-class optical storage devices and solutions, the company has also concentrated on developing enterprise-level markets.” the prospectus says.
During the reporting period, Amethyst Storage optical storage media was sold separately for the consumer market, and the specific product was a one-time recording Blu-ray storage medium (BD-R). Blu-ray storage started in the consumer market. The founders Zhen Mu and Luo Tiewei have long been engaged in the optical storage industry, and led the founding team to develop small-capacity (25G) BD-R industrialization technology (including recording materials, production processes, and underlying coding strategy).
“The industry's only optical storage technology company that has started from the development of the bottom-layer optical storage medium technology and formed a whole industry chain product service for consumer-grade and enterprise-level markets.” Amethyst Storage continues to emphasize its business of uniqueness in the prospectus. Along with the accelerated penetration of enterprise-level market , products and services, optical storage devices and solutions for the enterprise-level market have become the main source of revenue for Amethyst Storage, and the revenue of optical storage media for the consumer-grade market has shrunk year by year.
Essence Securities analyst Zhu Haibin said that global data will increase to 175ZB in 2025 (a ZB represents 10 trillion bytes), a five-fold increase. With the introduction of national information security and big data policies, the application of optical and magnetic hybrid storage architecture in enterprise storage, and the demand for high-speed growth of data circles and data tiring, the industry will usher in new development opportunities.