KATIS "AI Data Center Benefits Accelerate... Performance Rebound Expected in Second Half"

KATIS, a company specializing in spatial awareness security platforms, is expected to see its performance rebound in the second half of the year, driven by increased orders as AI data centers expand and a substantial backlog of large-scale projects. The company is also cited as having mid- to long-term potential for revaluation of its corporate value, particularly as it secures new growth engines with next-generation security platforms based on post-quantum cryptography (PQC).

On September 11, Valufinder, an independent research firm, released a report predicting that KATIS will hit its earnings trough in the first half of this year and will enter a normalization phase starting in the second half. Woobin Jeon, a researcher at Valufinder, evaluated that KATIS stands out among listed domestic companies, as it has no direct competitors with a similar business structure and demonstrates strong customer lock-in effects due to its high reordering rate.

KATIS mainly supplies integrated security platforms for industrial infrastructure, combining access control and alarm monitoring for critical national facilities. Its major clients include nuclear power plants, international airports, data centers, and financial institutions—all sites demanding a high level of security stability and system continuity.

References accumulated from high-security-required sites have been translating into new orders. In fact, of KATIS' top 20 revenue-generating clients in 2023, 16 placed repeat orders in 2024, resulting in a particularly high reordering rate.

Recently, as the expansion of AI infrastructure heightens the importance of physical security at data centers, related orders have also been increasing. During May and June, KATIS secured about KRW 900 million in new data center orders, including KRW 320 million for physical security implementation at Naver's "Each Sejong" site and KRW 580 million for the Gimpo data center.

KATIS' long-term partnership with Naver is also cited as an important foundation for expanding its order book. Since 2008, starting with Naver’s Bundang headquarters “Green Factory,” KATIS has continuously handled the construction of security systems at Naver’s key business sites, including the Chuncheon data center, the new headquarters 1784, and the Each Sejong data center.

Notably, as Naver, together with partners like NVIDIA and Brookfield, pursues the large-scale development of AI infrastructure centered on the Each Sejong site, analysis suggests that the potential for additional future orders is growing. Valufinder expects that if large-scale data center expansions continue, KATIS—with its proven references—will occupy an advantageous position in subsequent projects.

The backlog of orders further supports expectations for a turnaround in performance. As of the end of the first half of this year, KATIS’ order backlog stood at 34 projects totaling KRW 4.39 billion, about 1.6 times the company’s annual revenue of KRW 2.79 billion last year. Given the nature of public-sector projects, where approximately 70% of annual revenue typically concentrates in the second half, it is highly likely that results will normalize starting in the second half after passing the low point in the first half.

PQC-based security platforms are cited as a key mid- to long-term growth engine. KATIS has obtained GS certification for “AxiQuant,” an integrated platform applying post-quantum cryptography to biometric data and access control monitoring systems, and is working to register it for public procurement in 2027.

Researcher Jeon also highlighted that there are no other listed domestic companies that have both applied PQC to physical security platforms and obtained certification. Should AxiQuant’s registration for public procurement be completed, sales to public institutions are expected to expand, possibly leading to revenue growth and a revaluation of corporate value.

A KATIS representative stated, “We are actively responding to the expansion of the AI data center market based on the technological capabilities and references accumulated in high-security markets such as key national facilities and data centers. In addition to strengthening the competitiveness of our existing physical security businesses, we will continue to adapt to the changing security environment through our next-generation PQC-based security platforms.”

This content was produced with the assistance of AI translation services.