Electric Optic Systems (ASX:EOS) Lands Major $120M Asia Military Contract, Is It Time to Buy?

EOS Fires Up Second High-Energy Laser Sale

Electric Optic Systems (ASX:EOS) is moving toward a potential partnership with a South Korean venture to deliver a defence laser contract worth about A$120M. This marks the company’s second sale of a 100 kilowatt class high energy laser weapon system, following an earlier European deal. From what we can see so far, the agreement involves manufacturing a single 100 kilowatt HEL unit in Singapore, with additional long term value tied to a proposed Korean venture and associated IP licensing. On the back of this news, EOS shares jumped around 15% this morning.

This development signals that Electric Optic Systems is beginning to validate its laser platform at a commercial level. Defence customers tend to move slowly, so a second sale in such a short window suggests growing confidence in the technology. The real upside, however, sits in the long tail opportunities. If the Korean venture moves ahead, EOS could establish a recurring revenue stream through licensing and future system builds. The balanced view is that execution risk remains high and defence timelines can stretch out longer than investors expect, but today’s announcement is a meaningful step in the right direction.

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Electric Optic Systems Defence Tech Story Just Got Real

The contract totals A$120M and includes an upfront payment of US$18M. The weapon system, known as the Apollo high energy laser system, is designed to counter UAV and swarm attacks. It is a mounted laser weapon with power levels between 50 and 150 kilowatts, a range of up to three kilometres, and the ability to take down more than twenty drones per minute. For smaller drone threats, it is a highly optimised system. For larger, higher flying UAVs, it will be interesting to see how these laser systems evolve to counter more advanced platforms.

These two deals, one from Europe and now the proposed Korean venture, begin to validate the EOS HEL technology after extensive testing. They position the company within the growing directed energy market, where the cost per engagement is significantly lower than traditional kinetic systems. Continued success with these contracts could also open additional export opportunities, leveraging the Singapore facility as a scalable production base.

The Investors Takeaway For Electric Optic Systems

For shareholders, this contract provides another source of revenue visibility, with potential inflows beginning in 2026 and peaking after 2027. EOS now has a backlog exceeding A$400M as of November 2025, with most of that expected to convert across 2026 and 2027. This underpins analysts’ price targets of around A$7.70. The deal may also support investor sentiment, similar to prior announcements that have driven share price gains. It helps reduce reliance on legacy markets such as Middle East RWS and increases exposure to sovereign demand in Asia.

At the current share price, the implied upside is roughly 35%. For growth focused investors who are comfortable with risk and volatility and want exposure to the fast growing counter UAV defence market, Electric Optic Systems could represent a compelling ASX option. However, after a 15 percent surge today, more conservative investors may prefer to place the stock on their watchlist and wait for a more attractive entry point.