Volatus Aerospace: Hot Candidate for Rising Prices
Defence stocks are not among investors’ favourites this year. Investors have also held back on drone stocks so far. Yet the technological trend is clear. Unmanned systems are becoming a central component of modern armed forces. They handle reconnaissance, border protection and both offensive and defensive tasks. And drones are increasingly conquering more areas of civilian life as well. That is why drone stocks currently offer investors an attractive entry opportunity. A hot candidate for rising prices, as soon as sentiment turns again, is Volatus Aerospace.
The Canadian company is increasingly positioning itself as a Western provider of drone systems with a civil and military range of applications. The technology company combines unmanned aircraft systems with reconnaissance, data and training services as well as its own AI-supported mission software. With a sales pipeline of around CAD 600 million, Volatus has a broad basis for growth. The projects cover defence, public safety, critical infrastructure and industrial applications.
The decisive factor now will be to convert this pipeline into concrete orders and rising revenues. Volatus took an important step toward strong revenue growth by opening a new production and integration facility at Montréal-Mirabel Airport. The roughly 53,000-square-foot site brings together manufacturing, systems integration and testing of autonomous systems. The first drone docking stations are already being delivered to commercial customers. In addition, production of the company’s own V-Series is set to begin there shortly. This includes, for example, the V200 Vantage, a fixed-wing aircraft with an 8 m wingspan, up to 35 hours of endurance, and a maximum takeoff weight of 160 kg. The platform is designed for missions such as reconnaissance, border protection, maritime surveillance, electronic warfare and communications.
Upside potential comes from cooperation with the UCan Brave Tech Centre, which is intended to promote technology exchange between Canada and Ukraine. The focus is on dual-use applications, counter-drone defence, autonomous systems, secure communications as well as reconnaissance and surveillance solutions. Thanks to its practical experience in drone operations and in defending against unmanned systems, Ukraine is regarded as an important source of impetus for Western armed forces. Volatus could benefit from this know-how and, with its Canadian manufacturing capacities, help to scale proven technologies for NATO states and other allied markets. This increases the strategic importance of the new site beyond mere production expansion.
https://youtu.be/F4ajDCojMRo?si=XNXoEHVhjc9cyVRW
OHB: AI Partnership with Schwarz Digits
OHB is cooperating with Schwarz Digits to integrate artificial intelligence more strongly into satellite manufacturing and into ongoing space projects. Schwarz Digits is the IT and digital division of the Schwarz Group, which includes Lidl and Kaufland among others and bundles its activities in cloud, cybersecurity, data and artificial intelligence. Among other things, OHB is to gain access to Schwarz Digits’ cloud, AI and cybersecurity infrastructure. A central building block is the data centre under construction in Lübbenau, which, once the first three modules are completed at the end of 2027, is intended to enable the secure operation of large AI models. The applications range from optimizing satellite design and evaluating large volumes of sensor data to training AI models for data processing directly in orbit. OHB sees this as a lever to industrialize manufacturing processes and to boost its own innovative strength. At the same time, both companies emphasize Europe’s digital and technological sovereignty: critical data, AI models, and value chains are to be controlled as independently as possible of non-European platforms. The rights issue for existing minority shareholders runs until Wednesday, July 8. The shares can be subscribed at EUR 300. On the stock exchange, the share is trading just below this level. Last Monday, OHB reported that CEO Marco Fuchs had ordered shares worth around EUR 1 million as part of the capital increase.
TKMS: The Frigate Deal Could Move Quickly
After the cancellation of the F126 programme, the Ministry of Defence apparently plans to quickly advance a replacement solution. According to “hartpunkt.de”, the so-called EUR 25 million proposal for four new frigates of the MEKO A-200 DEU class is to be submitted to the Bundestag before the summer recess. The ships are designated F128 and are to be built by TKMS. A preliminary contract with the Kiel-based naval group has already been in place for several months, allowing long-lead items to be ordered and preparatory work to start. However, the final contract is still pending. According to “hartpunkt.de”, which claims to have learned from well-informed circles, around EUR 6.63 billion gross is to be earmarked for the first batch of four frigates. In addition, the contract is said to include an option for four further identical ships, which could be exercised by the end of 2026. This second batch would accordingly cost a further EUR 5.3 billion. Delivery of the first F128 is already scheduled for December 2029, with subsequent units to follow at nine-month intervals. This would allow TKMS to come into play significantly faster than was foreseeable with the failed F126 project.
However, the price development is causing debate. The unit price of an F128 is estimated at around EUR 1.57 billion, roughly 70% above earlier assumptions. One key reason is apparently that the original calculation assumed eight ships and fixed costs are now spread across only four units. Added to this are more expensive components, such as launch systems for long-range missiles, higher supplier prices and additional requirements from the navy, among other things related to counter-drone capability. The F128 is to focus on anti-submarine warfare and, among other things, be equipped with a modern towed sonar. Observers also consider the installation of a bow sonar possible, which would expand its capabilities compared with the F126. A clear shift is also emerging among the suppliers. TKMS’s most important partner is set to be Saab, which could supply, among other things, the 9LV command-and-weapon-control system, radar technology and integration services. According to information from “hartpunkt.de”, the ships are to be built at Stahlbau Nord, a company of the Heinrich Rönner Group. This would mean that Rheinmetall Naval and German Naval Yards, which were involved in the F126 project, would likely be left out. For Thales, Hensoldt and Rohde & Schwarz too, the F128 is likely to offer significantly less potential, as things currently stand, than the original F126 project.
The new frigate contract is expected to strengthen TKMS’s order backlog further. The stock is likely among the more attractively valued defence names, although the naval segment remains highly complex and capital-intensive. Volatus Aerospace is a strong candidate for a potential rebound in the drone sector—this should only be a matter of time. Meanwhile, OHB’s share no longer appears inexpensive by conventional valuation standards.
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