Why Is Kleos Space Soaring High This Year?

Kleos Space S.A. (ASX:KSS) has announced that it has started taking certain steps for the commercialization of its ‘Data as a Service’ (DaaS) product this year. It has engaged itself with a Frankfurt-based corporate advisor for liaison with the Frankfurt Stock Exchange and also having discussions with the European investors.

Further, Kleos Space S.A has also engaged an equity research firm for preparing as well as publishing ‘initiating coverage’ in approximately four weeks. It will also include a comprehensive analysis of the market and competitive environment and news related reports over the next 12 months.

To engage new investors central to the European industry, the company is looking forward to the dual listing at the Frankfurt Exchange.

Andy Bowyer who is the CEO of Kleos Space stated that Discussion with the European investors before the launch of the Kleos Scouting Mission forms a part of the strategy to build upon the company’s support in Australia as well as register European-based investors who are engaged with other local defense and space-enabled companies in the ISR market worth US$41 billion.

On 11 March 2019, Kleos Space S.A (ASX:KSS), a company which is into the business of launching and operating satellite infrastructure for generating unique, commercial data and sell the data as a service internationally, has announced that it has entered into a Channel Partner Agreement with Victoria Falls Technology LLC, which is a newly created specialist US-based defence company. The agreement allows the procurement and integration of radio frequency reconnaissance data of KSS into the various US defence programs along with all the projects anticipated to the US Air Force Small Business Innovation and Research (SBIR) programme.

As per the non-exclusive agreement, the US defence company would be able to procure as well as incorporate the Scouting Mission Data of Kleos into their defence offering as a part of ‘innovation and research project’ proposals. The SBIR programme is designed in such a manner which can accelerate the development and production of emerging technologies that can be used by the US air force. However, this program is restricted to US companies with a maximum of 500 employees, but the international corporations can become a partner with the US companies as a part of a team.

The development work based on the selection of Kleos’ Channel Partner’s proposal is expected to start in 2020 and will be carried out for 1 to 2 years, where the expected revenue generation opportunity for KSS will be in the range of US$750K - US$3 million. Further, there is a scope of further long-term projects through the SBIR programme projects.

The multi-satellite system of Kleos Scouting Mission has the potential to deliver a global picture of hidden maritime activity. It will also improve the intelligence capability of government and commercial entities during the time when the Automatic Identification System gets defeated, imagery unclear as well as targets out of patrol range.

By the second quarter end of CY2019, the company expects to launch its first revenue-generating satellites on a Rocket Lab Electron rocket from New Zealand.

Andy Bowyer, who is the CEO of Kleos Space stated that the customers of KSS would be able to have an unprecedented view of global maritime activity and that the company is very excited about the agreement and will work closely with the Key US-based defence company to confirm their success.

On 29 January 2019, the company announced its quarterly results. In the Q4 of FY2018, the company established the UK subsidiary to aim at the UK defence and security market. During the period, the company has signed an MoU with Ball Aerospace, which is an US-based aerospace orbital insight to develop a route to market partnership.

In the last six months, the shares of KSS have generated a return of 57.69%. Today, 12 March 2019, the shares are trading at A$0.205 (As at 1:30 PM AEST). The stock has offered a YTD return of 95.24% as on 11 March 2019. The company has a market capitalization of A$21.86 million and approximately 106.63 million outstanding shares.

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