Creotech Instruments — A leader in Central European SpaceTech

Creotech Instruments — A leader in Central European SpaceTech

Creotech Instruments is a Polish company founded in 2012 by alumni of CERN, the European Organization for Nuclear Research. It is quoted on the Warsaw Stock Exchange New Connect market since October 2021. With significant flight heritage, it is developing its own proprietary microsatellite subsystems and platforms for commercial sales from 2023. It is also active in unmanned aerial vehicle (UAV) operation and data analysis. Creotech is one of only a few companies worldwide that is seeking to develop controls for quantum computers and quantum telecommunications. Both areas should augment space segment growth.

Andy Chambers

Written by

Andy Chambers

Director, Industrials

Creotech Instruments

A leader in Central European SpaceTech

SpaceTech – satellites

QuickView

26 April 2022

Price

PLN149

Market cap

PLN237m

Share price graph

Share details

Code

CRI

Listing

Warsaw NewConnect

Shares in issue

1.59m

Business description

Creotech Instruments designs, builds and assembles satellites and systems, building on its background in complex electronics. It also provides support for unmanned aerial vehicle (UAV) operations, data analysis and integration. Furthermore, it offers advanced control and measurement systems for large-scale scientific projects.

Bull

Microsatellite development completed and moving to commercialisation phase.

Diversified potential revenue streams in UAV and quantum computer markets.

Leading technology capability facilitates sales to third parties.

Bear

Considerable competition on the LEO small-satellite (smallsat) market could affect business model.

Likely long term and technologically complex solutions being sought in quantum computing.

Concentrated share ownership and key personnel.

Analyst

Andy Chambers

+44 (0)20 3077 5700

Creotech Instruments is a Polish company founded in 2012 by alumni of CERN, the European Organization for Nuclear Research. It is quoted on the Warsaw Stock Exchange New Connect market since October 2021. With significant flight heritage, it is developing its own proprietary microsatellite subsystems and platforms for commercial sales from 2023. It is also active in unmanned aerial vehicle (UAV) operation and data analysis. Creotech is one of only a few companies worldwide that is seeking to develop controls for quantum computers and quantum telecommunications. Both areas should augment space segment growth.

Building on significant space heritage

Over the last few years, Creotech has developed its own standardised microsatellite platform, HyperSat, which was completed in March 2022. A modular platform using a 40x40x10cm base platform (1HU), the design is larger than CubeSats (1U = 10x10x10cm), therefore allowing greater payloads of up to 60kg and functionality at competitive prices. The first application, EagleEye, is to be deployed in low Earth orbit (LEO) in 2023 as an operational in-orbit technology demonstrator for proprietary systems and third-party instruments. It will carry a telescope providing high-resolution images of Earth. A further three smaller HyperSat microsatellites for the Polish Imaging Satellites (PIAST) mission for the Polish Ministry of National Defence are expected to be deployed in 2024.

Goals for 2025

Management has indicated its main goals to attain by 2025 for the three domains it intends to service: space, Earth atmosphere (UAV) and Earth (quantum controls in the longer term). In space, its first microsatellite deployments next year will support commercial sales of satellites with 10–20 orders anticipated each year. It also aims to become the leading Polish provider of UAV support products by supplying systems such as risk analysis, planning and control for UAV missions. In quantum controls, it aims to be one of only a few suppliers of comprehensive control systems for quantum computers and quantum telecoms, supporting a position as a leading European satellite data integrator in partnership with the EU Agency for the Space Programme and the European Commission. Together with CERN, it is also seeking to develop and launch a sub-nanosecond synchronization system for telecoms.

Growth set to accelerate

The company started 2022 with a sales pipeline of PLN30–35m. It has issued a prospectus with the polish Financial Supervisory Authority in connection with its proposal to transfer to the main market of the Warsaw Stock Exchange during H122 alongside a PLN40–50m funding round (up to 396.6k Series I shares).

Historical financials

Year
end

Revenue
(PLNm)

EBITDA
(PLNm)

EPS
(PLN)

DPS
(PLN)

P/E
(x)

Yield
(%)

12/20

29.0

3.72

1.27

0.0

117.3

N/A

12/21

33.6

3.23

0.38

0.0

392.1

N/A

Source: Company reports

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London +44 (0)20 3077 5700

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been prepared and issued by Edison. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

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Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

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This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

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Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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