Petra Capital: Prime time for EOS in Australia, page-2

Eos revenue proposition has changed markedly over the last few years. They were staring at the valley of death initially after losing the CROWS contract which they bet the company on and lost after getting blindsided by the defence primes. They went stealth/survival mode and managed to snag a big contract with the UAE and are now changing the conception of modern warfare to a full spectrum warfare minus underwater and cyber-security in an offensive sense.

They are essentially making every vehicle a precision combat fighting vehicle down to the little dune buggies used by the special forces so every vehicle and defence force personnel has sniper like precision at ranges out to 2+km

So from 1 program they have the following revenue potentially major revenue streams, so they have a lot of shots on goal now and you would think something should hit in a major way.

1) Spacelink, need funding as equity wise that is approx 400m+ and debt 1.2bn, have derisked as they have NASA funding a LEO-MEO demonstration on the ISS. Ground to GEO demonstration has been delayed by more than a year with the latest delay launch vehicle issues. Dunno if they have linked in with the european system to demonstrate/fine tune their technology and what are the conditions for their SPAC listing.

2) R400 - UAE contract gives them a few more years of decent revenue and cashflow seems to have finally turned the corner on the contract. Oil prices are high for now so payments shouldn't be an issue currently and will become less company destructive over time. Other platforms will be forced to upgun as the european stryker force did so hope for some sales there.

3) R800 - More expensive platform with increased range and demonstrated on a UAE 8x8 so potentially more sales there if the UAE is happy with the R400

4) CUAS - They have said they are preferred tenderer on 2 programs >1bn, about to field a 50kw system next year with the capacity to cut through bisalloy armour already, although it is probably at quite close range and on a ruggedised vehicle system next year.

5) Land 400 phase 3 - Approx $100m in the bag as the RWS is specified for both vehicles, $1bn if the Redback gets chosen and the sole source howitzer deal has been pending land 400 phase 3 probably to determine how much Hanwha invests into Australian content. Key criterion was commonality with phase 2 which would give the Lynx the advantage but is more costly and puts all your eggs in one basket. It's Queensland based though and politically that is where elections are one these days vs Geelong which is Labour heartland

6) C4EDGE - They seem to have cobbled together a vast array of Australian suppliers in a quick timeframe which should showcase what EOS can do as a prime integrator so it has a lot riding on this going right and there are potentially lucrative follow on contracts with the government seeming to be quite motivated to move to an Australian communications system

7) SMA - I think probably NIOA is the only other major truly Australian not just Australian subsidiary out there and all they are bringing to the field is capacity to make the ordinance which to my mind is more of a commodity proposition and it is not like they will refuse profitable contracts to supply ordinance if SMA gets up instead of them. I would speculate that EOS was talking with them about joining the SMA but they decided to go it alone to go up the food chain with NOVA providing the relationships with defence and maintenance testing/qualification know how. Possibility they get some IP transfer from Diehl for the initial missiles as quid pro quo for allowing them to expand to RWS in Europe

8) ROCV - Seems to be the future concept for the western world, forward scouts/effectors with the ROCV mounting a 30mm cannon with effect out to 2km, missles for further and networked optical feed and radar feed out to 10km. A lot more effective than a rifleman and particularly useful for NATO as they can just pack these up, fly them off to the eastern front without risk to the lives of the western european operators

9) EM solutions - Chugging along nicely and provides inroads to the navy and knowledge for ground SATCOM terminals with the development of optical links which would seem insanely hard to do on a platform that is rocking about on the ocean but potentially you gyro stabalise it and then your terminal moves independently of the boast but yeah to hard department for my books initially.

10) SSA - Number of objects they are sensing is increasing exponentially and they have been working with Palantir for integration purposes and Australia is important as it gives a southern hemisphere reference point for orbital analysis as we are a stable continent for the western powers. Lets you know what everyone else is doing up in space. GEO is easy to track, you can't move your satellite much or it is not in GEO orbit. I can't imagine that Spacelink satellites would go up without an optical payload to visually inspect the LEO satellites and then you have laser ranging from below.

11) Space debris mitigation - They have been developing for a long time the ability to nudge bits of space debris using photon pressure to avoid conjunctions as not a lot of pressure is required to change orbit given the velocities but who pays for this to happen is unclear and if you can nudge stuff to dodge things getting hit you can potentially nudge stuff to cause it to hit. It would be awesome if they could nudge stuff so that they deorbit much more quickly but what happens if something goes wrong and who pays for it are unclear.