Defence spending to reach new heights

研报英文原文证据摘录

Defence spending to reach new heights

Macquarie Equity Research Codan

Opportunity for DTC

When encompassing estimated communication layer drone costs and US-specific programs,

together these frame a large, multi-year, structurally growing US demand pool that plays

directly to DTC's niche. DTC's key offering of resilient datalink, mesh-networking and EW-

hardened communications layer is directly linked to various components that multi-domain

drone and unmanned systems require.

Whilst headline spending is substantial, we estimate the comms/C2 "connective tissue" slice

that DTC targets would sit between high-single to low-double-digit percentages of unit cost.

Highly valuable opportunities for DTC from the US programs outlined above include the

LUCAS program, US Army medium/long-range reconnaissance echelons developments and

ongoing R&D developments in DAWG.

Collectively, these programs validate and expand DTC's addressable market and structurally

shift its revenue towards recurring, non-conflict US defence demand over the medium term.

NATO Summit Defence Industry Forum announcements

The NATO Summit Defence Industry Forum started yesterday on 7 July, with a focus on

transatlantic defence production, joint procurement and capability initiatives. Overnight,

NATO announced the new "Drone Edge" initiative, which will include more than $40bn in

investments from 30+ allies (mainly Europe) into counter drone capabilities over the next five

years (NATO international).

"Drone edge" initiative key takeaways:

• NATO is rapidly expanding its ability to deploy and operate drones at scale; at the same

time NATO is building robust counter drone defences.

• NATO will launch a counter-drone marketplace to provide procurement of new NATO-