Original-Research: CYAN AG (von GBC AG)

Pressemitteilung: Original-Research: CYAN AG (von GBC AG)

Original-Research: CYAN AG - von GBC AG

Einstufung von GBC AG zu CYAN AG

Unternehmen: CYAN AG

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.
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Datum (Zeitpunkt)Fertigstellung: 10.12.18 (09:40 Uhr) Datum (Zeitpunkt) erste Weitergabe: 10.12.18 (10:30 Uhr)
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