Catis poised for H2 rebound on AI data center orders, strong backlog

Catis, a spatial-recognition security platform company, is drawing growing market attention on the strength of its AI data center (AIDC) scale-up exposure and a robust order backlog.

Independent research firm Valuefinder said Friday that Catis has passed its earnings trough from the first half of this year and is expected to enter a normalization phase in the second half, with a valuation re-rating anticipated on the back of its next-generation PQC technology and AIDC momentum.

Valuefinder analyst Jeon Woo-bin highlighted Catis's spatial-recognition security platform as a differentiated competitive advantage, noting that no other listed company in South Korea shares the same business structure. He also cited a strong lock-in effect as a key strength — 16 of the company's top 20 customers by sales in 2023 placed repeat orders in 2024.

Catis primarily supplies an industrial infrastructure security platform that integrates access control and alarm monitoring for critical national facilities. Its client base includes nuclear power plants, international airports, data centers and financial institutions — facilities that demand the highest levels of security stability and system continuity. Analysts say this high-end client base makes it easier to expand new orders and drives the company's high re-order rate.

The trend has accelerated particularly in the AIDC segment, as the expansion of AI infrastructure has heightened the importance of physical security at ultra-high-density data centers. According to the report, Catis secured roughly 9 billion won in new data center orders in May and June alone, including 3.2 billion won ($2.39 million) for physical security at Naver's "Gak Sejong" facility and 5.8 billion won for a data center in Gimpo.

The long-term partnership with Naver was cited as a prime example of Catis's unrivaled market position. Starting with Naver's Bundang headquarters "Green Factory" in 2008, Catis has been the sole security systems provider for every Naver site for 18 consecutive years — covering the "Gak Chuncheon Data Center" (2014), the new "1784" headquarters (2019) and the "Gak Sejong Data Center" (2023).

Order visibility for the coming years has also improved significantly, as Naver has moved to concretize plans for a gigawatt-scale AI factory centered on "Gak Sejong" in partnership with Nvidia and Brookfield. Valuefinder assessed that Catis, as Naver's proven security partner, stands a strong chance of winning contracts for subsequent scale-up phases as the data center expansion continues.

The visibility of an earnings rebound is equally strong. As of the end of the first half of this year, Catis held an order backlog of 34 contracts totaling 43.9 billion won — equivalent to 1.6 times last year's full-year sales of 27.9 billion won. Given that roughly 70 percent of annual revenue is concentrated in the second half due to the nature of public-sector procurement, a full earnings recovery is expected to materialize from the second half onward.

The company's next-generation growth driver, PQC security, is also attracting attention. Catis has obtained GS certification for "AxiQuant," a next-generation integrated platform that applies post-quantum cryptography to biometric data and access control management, and is pursuing registration with the public procurement system in 2027.

Catis is also moving into the domestic AI security screening market through a partnership with Israeli AI security screening firm SeeTrue Screening. The two companies signed a partnership agreement last month covering domestic sales and technical support for SeeTrue's AI-based automated threat detection solution. Through the arrangement, Catis plans to supply the technology to airports, customs offices and logistics facilities in South Korea, expanding the detection scope beyond firearms and explosives to include narcotics and undeclared foreign currency.

"We are actively responding to the expansion of the AI data center market, drawing on the technology and track record we have built in markets that demand the highest levels of security, including critical national facilities and data centers," a Catis official said. "We will strengthen the competitiveness of our existing physical security business while adapting to the evolving security environment through our next-generation PQC-based security platform."

Catis hit the daily upper limit on Kosdaq on Friday, closing up 29.91 percent at 2,315 won.