Kleos Space prepares for satellite launch in August

Kleos Space ASX KSS GomSpace satellite launch data Luxembourg
Kleos Space is gearing up for its scheduled launch in August, with data to flow soon after.

Space-enabled intelligence data company Kleos Space (ASX: KSS) is on the brink of executing its highly-awaited launch into space with the company now “weeks away” from satellite bearing rocket launch, according to its chairman RAF Air Commodore Peter Round.

While speaking with Small Caps, Mr Round made a tentative revenue forecast by confirming that Kleos’ revenue target for 2020 is approximately $31.9 million, which equates to less than 1.5% of the global maritime information market, which is its primary target market.

If Kleos lives up to its own estimates, the company is in with a shot of significantly expanding its existing valuation of $32 million market capitalisation.

While addressing the company’s shareholders at its annual general meeting, Mr Round said that Kleos has partnered with Rocket Lab in order to execute its nano-sat launch next month. To make it to the launch pad, Kleos worked closely with its partner GomSpace with its first set of satellites now “built and mission ready”.

“This has been a real cooperative exercise where together we have identified further enhancements which we will incorporate into future designs to ensure we are the leaders in satellite VHF monitoring,” said Mr Round.

“We will take the data from our satellites and merge it, when appropriate, with other data sources to create product bundles that are flexible for our end users.”

“Our technical team have delivered, and our partners have performed well,” he said.

The culmination of these efforts will see initial data flow from the satellites within the coming months, leading to first revenues later this year.

Pre-launch preparation

Kleos Space listed on the ASX last year with intentions to deliver multiple salvos of nano-satellites into space to facilitate a wide range of services on Earth, including VHF monitoring and reconnaissance.

The first Kleos “space satellite system” known as Kleos Scouting Mission (KSM) will deliver commercially available data and perform as a technology demonstration. However, its capabilities and revenues are expected to grow over time as the company further develops its technology and improves upon existing functionality.

Kleos says that KSM is a “keystone for a later global high capacity constellation” and has confirmed that the scouting mission will deliver targeted daily services to begin with, while the full constellation will deliver “near real-time global observation”.

As a company, Kleos sees itself as a data-as-a-service (DaaS) entity that guards borders, protects assets and saves lives by delivering a unique global activity-based intelligence and geolocation product for public and private sector customers – a from US defence contractors, government national security and intelligence agencies, through to the insurance and asset protection sectors.

According to industry research conducted by Mordor Intelligence, the global space-based Earth observation data product revenues were US$2 billion (A$2.87 billion) in 2016 while the global maritime information market is expected to reach US$1.41 billion (A$2.02 billion) by 2020.

Currently, space technology is expected to record sharp growth rates considering its novelty and comparatively higher levels of spare capacity. The research company also stated that the earth observation data market is projected to grow “exponentially”.

Space financials

After almost a year of being listed on the ASX, Kleos is aiming to generate revenues in the near term and says that early adopters, who are primarily large US and European defence contractors, have already begun signing contracts.

Kleos has additionally secured early stage agreements with other majors including Airbus, Ball Aerospace and IMSL showing the diversity of users interested in acquiring Kleos’ unique data.

The company’s growing momentum and imminent launch are expected to take it into commercial territory and compete with the likes of Hawkeye360, a company valued at over A$100 million at current market prices.

Additional launches have also been scheduled for next year.

“For the future, we look to another satellite launch in the first half of next year and an expansion of our teams in technical and business development. More satellites mean a better service and increased revenue,” said Mr Round.

Kleos is currently trading 50% higher compared to its listing price of $0.20 in August last year.

George is an award-winning market analyst who has authored articles and editorial opinion pieces for multiple publications around the world. He has written about a wide variety of topics including financial markets, stocks, trading, politics and economics.