[Click e-Stock] "MDVI's Differentiated Growth Driven by Dongshuxisan Project... Shares Undervalued"

Kiwoom Securities analyzed on May 8 that differentiated growth is expected for MDVI based on China's East Data West Computing (Dongshuxisan) project. The firm did not provide an investment opinion or target price.

MDVI is an SSD specialist with a product portfolio ranging from consumer SSDs to BGA SSDs and enterprise SSDs. The company started with its existing PCB business and began developing SSD technology in 2014. After commencing SSD commercialization in 2019, it entered the enterprise SSD market in 2023. As of last year, 96.8% of its revenue was generated from the enterprise SSD segment.
Oh Hyunjin, an analyst at Kiwoom Securities, stated, "MDVI is expanding its market dominance based on its technological competitiveness through major domestic IDMs. It is also expanding deliveries mainly to Chinese server manufacturers, where supply remains relatively limited despite increased SSD demand driven by government-led data center investment."
Growth driven by the Dongshuxisan project is particularly anticipated. China is implementing the "East Data West Computing" policy to foster its IDC industry. Dongshuxisan means "processing data from the east in the west." The policy aims to support data demand in the eastern region by building large-scale IDC clusters in western China.
Analyst Oh evaluated, "Since MDVI began supplying enterprise SSDs to major Chinese clients in 2023, its supply volume has shown a steady upward trend. These major Chinese clients are core suppliers in the Chinese server market and are strengthening their market position, particularly through recent public sector projects."
He added, "In the first quarter of this year, sales to major Chinese clients accounted for 99% of MDVI's revenue. The company is also diversifying its client base in response to growing demand. Additional supply contracts with new clients are expected in the first half of the year, and collaboration with central Chinese enterprises that have signed IDC construction agreements is also a positive factor."
Kiwoom Securities forecasts that MDVI's sales and operating profit will reach 94 billion KRW and 15.5 billion KRW, respectively, this year, representing increases of 95% and 212% year-on-year. He emphasized, "Given MDVI's preemptive establishment of its market position amid large-scale investment trends in China and its development of next-generation products (next-generation SSDs and DRAM), the current share price appears to be significantly undervalued considering its mid- to long-term growth potential."