Special report: MST Access says a perfect storm is brewing in the cybersecurity industry that could soon see explosive growth for secure information sharing specialist archTIS.
The brokerage firm published a report valuing archTIS (ASX: AR9) at 70c per share, 70 percent more than its current price of 40.5c.
In part because of the advent of COVID-19, a confluence of events has made protecting sensitive information more important than ever, especially for industries like defense and education.
MST’s senior research analyst Glenn Wellham noted in his report that archTIS is well positioned to benefit, as these are its two main target markets in addition to its focus on government agencies.
“Over the past 12 months, there has been a significant increase in cybercrime activity as criminals seek to exploit organizational vulnerability due to the overnight shift to almost entirely online operations as a result of COVID-19, ”Wellham wrote in his report.
“Never before has the security and control of information sharing been so demanded, which perfectly matches the experience, capabilities and pedigree of archTIS.”
MST says archTIS’s unique information-sharing platform, Kojensi, has garnered a lot of interest since its commercialization.
So far this year, the company has signed its first commercial contract in the defense industry, formed a partnership with Curtin University, as well as a global defense contract with Northrup Grumman and another 4 , $ 2 million with the Australian Ministry of Defense.
“ArchTIS Limited’s pedigree of over 14 years of working with the Department of Defense in developing secure information sharing capabilities has earned its place as a trusted partner in the most demanding industries,” said stated MST in its report.
COVID-19 creates more opportunities in cyber
According to MST, these accomplishments are just the tip of the iceberg of what archTIS is capable of over the next decade.
Australia has seen a sharp increase in cybercrime activity over the past 12 months as more businesses have been forced to convert to online operations due to COVID-19. More online workers means more information sharing, which leads to more errors, creating fertile ground for attackers to jump in and collect potentially sensitive data.
The Australian Cyber Security Center (ACSC) reported that the annual economic loss for the 12-month period through June 2020 was $ 328 million. A concentrated four-week attack could cost more than $ 30 billion and affect more than 163,000 jobs, according to the CCAA report.
In response, the federal government is tackling the influx of attacks by allocating more and more significant investments to strengthen its cyber capabilities.
Cyber security and the $ 270 billion question
Prime Minister Scott Morrison pledged $ 1.67 billion in August to improve Australia’s cybersecurity stance over the next decade.
This was just a drop in the bucket compared to the government’s next funding announcement: $ 270 billion over the next decade to the Department of Defense to pay for physical defense and cybersecurity capabilities.
MST believes that archTIS is in a privileged position to recoup a significant portion of this expense, having already established itself as a key supplier to the Department of Defense.
The broker notes that while archTIS will not be the sole bidder after a tranche of this investment, the history of the Canberra-based company of working directly with the Department of Defense to develop its platform will be a serious asset in attempting to gain new work. .
“These two initiatives [by the Morrison government] have a substantial element of information sharing requirements, ”the report said.
“ArchTIS can leverage the trusted ability of its Kojensi platform to meet these needs, either directly or indirectly, by offering its platform to a large number of small businesses who wish to bid on providing their products and services to agencies. government. “
The road ahead
As COVID-19 continues to shape the business climate and the demand for future cyber solutions, having a commercially viable and proven offering with extensive distribution networks and partnership is critical.
Wellham notes that archTIS is also certified to host “protected” level data that is in the national interest. Being licensed to host protected data requires strict storage protocols, and only a handful of Australian companies are certified at this level.
archTIS has also identified state and local governments, financial technology, telecommunications and utilities as key sectors for its expansion.
This article was developed in collaboration with archTIS, a Stockhead advertiser at the time of publication.
This article is not advice on financial products. You should consider getting independent advice before making any financial decisions.