By Stella Goh

According to Kenanga Research, JCY is expected to triple its earnings next year as its benefit from the massive upcycle in the Hard Disk Drive (HDD) market. The recent surge in the web computing was just the beginning of a long-term secular demand for mass capacity storage, with Total Addressable Market (TAM) estimated to rise from the current market size of US$12.5 billion to US$24 billion in FY2025.

Kenanga Research also expects the company to grow its net profit of FY2021 three times higher to RM150.8 million as it takes higher loading volume in the second half of FY2020 and FY2021. The orders from JCY’s two largest customers, which account for more than 80% of sales have increased by 47% and 21% respectively based on YoY basis. JCY International was experiencing a huge burst in data center development due to the sudden rise in traffic and bandwidth demand since the Covid-19 breakdown. For examples, online interactions such as e-learning, video conferencing and cloud file sharing and etc.

According to the two major customers, the market has strong demand for 14TB hard disks, as well as the upcoming 16TB and 18TB hard disks. While the Amazon’s cloud services arm is set to expand in Northern, with 2.5 million square feet of cloud devices expected to built in addition to its existing 50 data centers, and Google and Microsoft have also said they need to expand. They believe HDD will continue to dominate the data center space for next decade based on an economic standpoint.

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