Capital Raising, page-19

Nice analogy. I guess EOS is a little known company, with complicated business. Investors are also wary to invest in a small company, competing in a tough high tech environment with high confidentiality and large competitors. The risks associated with EOS used to be high.

The CEO made a presentation at the AGM on 29 may 2015, saying ‘our time has come’, mentioning ‘excellent prospects’ for the defense & space division. Calling all aboard. The stock traded sideways afterwards for 18 months on basically no news. Frustrating investors.

This time indeed is different, with an order book of 600 million for it’s R-400S RWS and negotiations with multiple clients who already have chosen EOS, foreshadowing an order book of 1 billion+ within months. The company is also fully backed by the Turnbull government and Efic.

EOS actually already predicted these events in it’s presentation from 22 may 2017:

For R-400S-Mk2 RWS they said: ‘Global market size of US$800m pa>five years. EOS should capture the first US$1b of orders, and take 40% of the remaining US$4b over the next five years’. This prediction looks very manageable now.

So, in the next 5 years they expect 2,2 billion USD in sales, 2,75 billion AUD. Based on a profit margin of 15%, this is including high margin after sales, this results in a profit of 413 million AUD for this product alone in the next five years. More than twice the current marketcap.

Then we have the EOS R2000 Remote Turret System. They said in the presentation:

Global market size > US$11b from 2018-2025 and 20% market share. This would also amount to a profit of 413 million AUD in the course of this period.

And last, EOS Space systems. 'The potential market for data is large, >$2b from 2019-2029 based on customer budgets'. I expect contract deals towards the end of the year. Recurring revenues.

Cheers