cyan AG
Original-Research: CYAN AG (von GBC AG): Buy

Original-Research: CYAN AG – von GBC AG

Einstufung von GBC AG zu CYAN AG

Unternehmen: CYAN AG
ISIN: DE000A2E4SV8

Anlass der Studie: Research Update
Empfehlung: Buy
Kursziel: 49.50 EUR
Letzte Ratingänderung:
Analyst: Marcel Goldmann, Cosmin Filker

Cyber security growth market offers enormous potential; Through the
acquisition of I-New, CYAN has evolved into a system provider for mobile
communications companies and has significantly expanded its customer base;
As a result of the I-New acquisition, CYAN is advancing in new dimensions
in terms of sales and revenue and has also increased its regional presence
and performance

CYAN AG is a leading global provider of white-label IT security solutions
with more than 15 years’ experience in the field of IT security. The
company’s core businesses are mobile security solutions for mobile and
fixed line (MNO, ISP) end users, virtual mobile operators (MVNO), insurance
and finance companies, and government institutions.

Through the takeover of I-New in July 2018, CYAN AG is developing into a
global system provider for MVNOs and will be able to significantly expand
its customer base and regional presence. The company currently has more
than 40 major MVNO customers, who in turn serve around 5.5 million
customers. CYAN AG’s IT solutions can be easily integrated into existing
customer IT infrastructure and marketed through a revenue share model,
enabling the customer to generate significant additional revenue.

The main focus of the CYAN Group is the protection of mobile data traffic.
This is the segment of the global IT security market that is growing at an
extremely fast rate. This is due to the fact that the number of digital
devices (smartphones, etc.) is steadily increasing and users of such
devices are increasingly using them for important and personal matters such
as email, mobile online banking, online shopping and social media. However,
this user behaviour also increases the risk of being affected by
cyber-attacks. According to statistics, 12.0% of EU citizens have already
become victims of cyber-crime. Against this background, we also assume that
this market will continue to record considerable growth rates in the
future.

The key competitive advantage of the CYAN security solution is that it is
implemented directly in the customer’s data centre – be it MNO, MVNO or a
financial institution. This eliminates the need for end users to have
downloads, as is typically the case with other security providers such as
Norton or F-Secure. This security solution is particularly attractive for
MNOs, because white label products are very scalable and more profitable
than competitor solutions. According to the company, CYAN AG is currently
the only supplier worldwide in this niche (USP). As a result, an MNO or
MVNO can achieve significant additional revenue with CYAN solutions.

For the Mobile Virtual Network Operators (MVNO) customer group, the CYAN
group also offers a data optimisation solution that enables significant
cost savings without major investment requirements on behalf of the MVNO
(not OPEX/CAPEX). According to the company, a maximum of 20.0% of the
purchased data volume can be saved, whereby the revenue is shared with the
MVNO (Revenue Sharing Model).

Likewise, the CYAN Group has developed special security solutions for the
third group of customers, financial and insurance companies, which can be
directly integrated into the existing app, e.g. a bank customer app (In-app
solution). In this way, the respective device and internet browsing can be
made safer and the actual banking transaction can be protected against
threats deriving from the internet.

In the past, CYAN AG has focused very heavily on the development of its
comprehensive IT security offer and has already been able to gain the first
well-known major customers, such as T-Mobile Austria and Poland, in the
context of an exclusive group contract with the company Deutsche Telekom
(T-Mobile). The described MVNO and banking products have also been
available for purchase and marketed since Q3/2017. Since then, contracts
have been concluded in these segments with Sberbank (EU), the South African
company MyBucks, Surf Telecom, Flash Mobile Telecom and Klik Mobile. In
addition, around 85.0% of I-New customers have already contractually agreed
to use the CYAN solution to optimise their data volumes since the
acquisition of I-New. The company expects around 50.0% of these customers
to have gone live with CYAN’s optimisation solution by the end of October.

The CYAN Group also has a wellfilled project pipeline of potential new
customers that will enable further significant revenue growth. The company
has stated that it has more than 100 potential customers in test phases,
negotiations or contractual discussions.

CYAN AG successfully completed its IPO in March of this year. As part of
this, EUR 31.70 million in investor funds (gross issuing proceeds) was
raised. Most of the funds raised were used to fully acquire the CYAN
Security Group.

Based on the innovative system offering, the existing customer base, new
customer relationships and the promising project pipeline, we expect
significant growth in sales and earnings for the future business
development of the CYAN Group. CYAN AG should in particular be able to
benefit from the I-New acquisition, which opens up significant synergy
potential. Above all, this is closely linked to I-New’s extensive customer
base (cross-selling). The company estimates the expected annual synergy
effects (sales and costs) from this acquisition will amount to EUR 6.0
million.

In concrete terms, we anticipate sales of EUR 13.45 million (including
I-New inclusion since July 2018) and an operating result (EBITDA) of EUR
4.50 million for the current 2018 financial year, which will result in
significant profitable growth compared to last year (sales and EBITDA in
2017: EUR 4.90 and 2.56 million, respectively). For the following year
2019, we anticipate a continuation of this dynamic growth course, in
particular due to the anticipated revenue synergies as a result of the
I-New takeover and new customer contracts and a further increase in EBITDA
to EUR 20.15 million with a turnover of EUR 35.10 million. The massive
increase in profitability will in particular be achieved through expected
economies of scale and synergy effects. In the following financial years,
new customer growth is expected to continue to develop dynamically and
enable long-term double-digit EBIT margins of more than 70.0% with even
more pronounced economies of scale.

On this basis, we evaluated the IT company using our DCF model and in doing
so, we determined a fair value of EUR 49.50 (previously: EUR 35.80). The
increase in the stock price target in particular resulted from the
inclusion of the effects of the I-New acquisition and the roll-over effect
(stock price target horizon from 2018 to 2019). Against the background of
the current share price, this results in a continued BUY rating.

Die vollständige Analyse können Sie hier downloaden:
http://www.more-ir.de/d/17381.pdf

Kontakt für Rückfragen
Jörg Grunwald
Vorstand
GBC AG
Halderstraße 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,5b,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter:
http://www.gbc-ag.de/de/Offenlegung.htm
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Datum (Zeitpunkt)Fertigstellung: 10.12.18 (09:40 Uhr)
Datum (Zeitpunkt) erste Weitergabe: 10.12.18 (10:30 Uhr)

——————-übermittelt durch die EQS Group AG.——————-


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