Nordex, Kleos Space, Allianz - Cybersecurity is booming!

Nordex - Target of Russian hackers?

Wind energy manufacturer Nordex can look forward to a return to the SDAX. The Company will be listed there again from September 19. Siemens Energy will move up from the MDAX to the DAX 40 in two weeks as HelloFresh slips down.

The reason for Nordex's expulsion was their missed window to deliver quarterly figures. Due to a cyber attack, Nordex's IT systems were shut down at various sites in Germany. Officials said it was a major incident. Nordex is a piece of the German utility puzzle.

For years, experts have warned against spying on power grids. Malicious actors disrupt the flow of electricity, engage in identity theft and manipulate data. In most cases, such attacks result in service interruptions for customers and lost revenue for electric utilities and/or system owners. Now a trail leads to Russian hackers. What reads like a plot from a Cold War movie is a bitter reality. Nordex's share price is not convincing either, given the challenging production costs, as margins remain too small. In the first half of 2022, the EBITDA profit margin was clearly in negative territory at -8.1%, having been +2.5% in the previous year's first half. As a result, companies and employees are experiencing high costs and losses.

Kleos Space - Providing surveillance technology and data from space

Kleos Space (ISIN AU0000015588) is proving just how valuable data-driven cybersecurity can be. The Luxembourg-based company uses space technology to help fight global environmental, security and economic problems. Their business model is to deliver high-quality data sets that help identify hidden and illegal activities.

For example, the technology from Kleos Space can help shed light on the darkness surrounding the shelling of Ukraine's Zaporizhzhia nuclear power plant. Both countries, Russia and Ukraine, accuse each other of shelling the occupied Ukrainian nuclear power plant. This is further escalating tensions in the region.

For Ukraine, this type of space technology is indispensable. Radar satellites complement optical satellites because they can take pictures at night or in bad weather. This gives Ukraine information that would otherwise be lost to us. Private satellite data in the Ukraine war comes from companies like Maxar, Planet, BlackSky, Capella Space and Airbus DS. Kleos Space can seamlessly join them. It is developing a new generation of space-based radio frequency tracking capabilities. These provide governments and commercial customers with monitoring data on radio, radar and other RF transmissions anywhere on Earth.

Kleos Space has a growing satellite collaboration and a wide range of interested customers, including government agencies and well-known corporations. Investors paying attention to the increasing cyberattacks on key vendors in the media should dig deeper into this sector and the Company.

Allianz - Expanding business intelligence in cybersecurity

Increasing attacks on technological infrastructures, such as at Nordex, or upgrading surveillance data to increase security has the opposite effect on insurance companies. According to a recent analysis by the German Insurance Association GDV, providers slipped into the red for the first time in fiscal 2021, with a combined ratio of 123.7% (2020: 64.7%). The figures leave no doubt that the insurance industry is facing a major problem. When asked, large providers such as Axa or Allianz (ISIN DE0008404005) still appear calm.

But US investment bank Morgan Stanley has downgraded Allianz shares from "Overweight" to "Equal-weight" and lowered its price target from EUR 239 to EUR 205. Analyst Ashik Musaddi justified the downgrade by citing a lack of earnings momentum and predictability with regard to share buybacks.

"Cybercrime is one of the biggest risks for companies - regardless of size - and needs to be taken seriously by all of us," said Scott Sayce, global head of cyber at Allianz. "We are seeing an increasing professionalization of cybercrime. At the same time, in a technology-driven world, companies rely on ensuring secure IT systems and protecting their data-based knowledge. Defending against cyber attacks has therefore become essential."

That is why Allianz SE, through its venture arm, is expanding strategic collaborations with companies that provide technologies and services for this purpose. This includes the US company Coalition from California. A cyber insurance and security provider for small and medium-sized enterprises (SMEs). With a Series F funding round of USD 250 million as an investment in the company Coalition, Allianz is now also learning.

Cybercrime and cybersecurity are key issues that every investor should consider for their investments. The attack on the wind energy company Nordex proves how vulnerable technical infrastructures are. It even flew out of the DAX due to this incident, as it was unable to deliver quarterly figures on time. Kleos Space, on the other hand, is a company specializing in surveillance technology to increase state security and protect companies against such attacks. Using innovative satellite technology, they support countries and commercial regions by providing high-quality data that leads to the detection and containment of criminal activity. Insurance companies are already feeling the consequences of the increase in this sector. Therefore, the Allianz Group is equipping itself through strategic partnerships to intensify know-how and business intelligence in the field of cybercrime. For investors, this is a booming market of the future and offers opportunities for lucrative investments.