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The S&P/ASX 200 Index (ASX: XJO) is having a pretty pleasing day of trading so far this Wednesday. At the time of writing, the ASX 200 is up a healthy 0.78% to 7,432 points. But one ASX 200 blue chip share is doubling the performance of the ASX 200 today. That would be the Transurban Group (ASX: TCL) share price.

The toll-road operator’s shares are currently trading at $13.825 each, up 1.58% for the day so far. That share price puts Transurban shares right in the middle of their 52-week range ($12.26 to $15.50).

So what’s pushing Transurban up so enthusiastically this Wednesday?

Well, it’s not entirely clear. There is no official major news or any announcements out of the company today. However, we do have a potential clue to point to.

Atlas Arteria tolls the bell on reopening

Transurban’s fellow toll road operator Atlas Arteria Group (ASX: ALX) has today released a traffic volume update covering the most recent quarter (1 July to 30 September). Although Atlas Arteria doesn’t own any Australian toll roads anymore, its traffic volume data (from France, Germany and the United States) could still give investors some indicative data on how other countries are bouncing back from COVID-induced lockdowns.

Atlas Ateria reported that the weighted average of traffic volumes across its four toll roads increased by 9.7% over the same quarter of 2020. Against the same period in pre-COVID 2019, it was up by 3.1%. In terms of toll revenue, the roads also experienced a 9.7% increase over 2020’s September quarter and a 3.7% increase over the same period in 2019.

The company noted the rise has been primarily driven by an increase in French domestic summer travel. This has come despite the introduction of ‘digital COVID certificates’ across Europe, which are now required for most travel and hospitality purposes.

It remains to be seen whether this Atlas Ateria update will correlate with Transurban’s figures. But judging by what the market has done to Transurban share price today, it seems many investors are optimistic. Atlas Arteria shares are also enjoying some outsized gains today too. The company is presently up 1.97% to $6.48 a share.

Transurban share price snapshot

Although the Transurban share price is enjoying a healthy day in the green today, the past few months haven’t been as rosy. The company remains up 2% year to date, far below what the ASX 200 has achieved (11.13%). It’s also up just 0.18% over the past 12 months, again trailing the ASX 200 (20.11%).

At Transurban’s current share price of $13.83, the company has a market capitalisation of $42.21 billion and a dividend yield of 2.62%.

The post Why is the Transurban (ASX:TCL) share price beating the ASX 200 today? appeared first on The Motley Fool Australia.

More reading

• Atlas Arteria (ASX:ALX) share price gains on revenue update
• ASX 200 (ASX:XJO) midday update: Kogan jumps, Flight Centre sinks
• 5 things to watch on the ASX 200 on Wednesday
• Why is the Vanguard MSCI Index International Shares ETF (ASX:VGS) underperforming the ASX 200 lately?
• Here are the top 10 ASX shares today

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Atlas Arteria Group (ASX: ALX) share price is in the green following the company’s quarterly traffic and revenue update.

Over the 3 months ended 30 September, the company experienced its busiest third quarter of any calendar year since 2018.

At the time of writing, the Atlas Arteria share price is $6.49, 2.04% higher than its previous close.

Let’s take a closer look at the quarter just been for the toll road operator.

The quarter just been for Atlas Arteria

The Atlas Arteria share price is gaining today on news the company’s European toll roads have seemingly recovered from their COVID-19 induced slump.

The company operates 2 toll roads in France, the APRR and the ADELAC, as well as Germany’s Warnow Tunnel.

Over the September quarter, 6% more kilometres were travelled on the APRR, bringing in 6% more revenue, than in the same quarter of 2019.

Meanwhile, the ADELAC saw its traffic and revenue drop by 4% and 2% respectively compared to 2019’s September quarter. Though, it did see 8% more cars and bring in 8% more fares than in the same period last year.

At the same time, traffic in the Warnow Tunnel was down 2% on that of the same quarter 2 years ago, but its revenue was up 1.6%. The changes were due to higher toll averages and roadworks on competing routes.

According to Atlas Arteria, the EU DigitalCOVID Certificate, essentially a vaccine passport, was launched in Europe at the start of the quarter. As of 10 October, 80% of adults in France and 78% of adults in Germany were fully vaccinated against COVID-19.

However, traffic on Atlas Arteria’s Virginia toll road, the Dulles Greenway, was nowhere near its pre-pandemic levels.

In the third quarter of 2021, the Dulles Greenway saw 30% less traffic than it had in the same quarter of 2019. It also brought in 28% less revenue.

However, when compared to the third quarter of 2020, the toll road’s traffic and revenue were up 26% and 32% respectively.

Over the quarter just been, Virginia had another wave of COVID-19 infections. As a result, many employees continued working from home and weekday traffic slumped.

Atlas Arteria share price snapshot

Despite today’s gains, the Atlas Arteria share price is 0.07% lower than it was at the start of 2021.

However, it has gained 3.7% since this time last year.

The post Atlas Arteria (ASX:ALX) share price gains on revenue update appeared first on The Motley Fool Australia.

More reading

• Why is the Transurban (ASX:TCL) share price beating the ASX 200 today?
• 5 things to watch on the ASX 200 on Tuesday
• These 3 ASX shares are going ex-dividend today
• Why Atlas Arteria, Baby Bunting, De Grey Mining, & New Hope are pushing higher

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Lake Resources N.L. (ASX: LKE) share price is breaking out on Wednesday, at one point surging 19.5% to a fresh all-time high of 76.5 cents. It has since softened, currently up 11.72% to 71.5 cents.

What’s driving the Lake Resources share price?

The Lake Resources share price is moving on no price-sensitive news. However, there is no shortage of bullish news from the broader lithium sector.

The battery-grade lithium carbonate price hit a fresh all-time high of 190,000 yuan/metric tonne (mt) last week. That surpasses its previous high of 160,000 yuan/mt at the end of September.

Earlier this month, the International Monetary Fund (IMF) released its world economic outlook report. The report cites lithium (and cobalt) as “probably the most promising rising metals”.

In the IEA’s [International Energy Agency] Net Zero by 2050 emissions scenario, total consumption of lithium and cobalt rises by a factor of more than six, driven by clean energy demand.

Prices [of critical metals] would reach historical peaks for an unprecedented, sustained period under the Net Zero by 2050 emissions scenario. The prices of cobalt, lithium, and nickel would rise several hundred percent from 2020 levels.

How is Lake Resources positioned to benefit?

Lake Resources is an emerging lithium producer, operating out of Argentina. The company aims to leverage direct extraction technology to produce a high purity lithium with significant ESG (environmental, social and corporate governance) benefits.

Its flagship Kachi Project hosts one of the top 10 largest brine resources globally, according to the 22 September presentation.

Furthermore, the company is targeting 25,500 tonnes per annum of lithium carbonate equivalent (LCE) by 2024.

Lake Resources has received offers from a number of potential financial partners including a formal letter of interest from Canada’s export credit agency, Export Development Canada (EDC), and a partnership with its technology partner, Lilac Solutions.

Lake Resources is in the right place at the right time. It is nearing the end of exploration and positioned to supply the world with highly sought after lithium.

As such, the Lake Resources share price has boomed 793% year to date, and is closing in on a $1 billion market capitalisation.

The post Lake Resources (ASX:LKE) share price jumps 19%, charges to an all-time high appeared first on The Motley Fool Australia.

More reading

• ASX lithium shares mixed on Tuesday as prices surge to all-time highs
• Why ASX lithium shares are booming on Thursday
• Up another 5%, the Lake Resources (ASX:LKE) share price is booming. Here’s why
• Why Computershare, Lake, Premier Investments, & Woodside shares are rising
• Why Lake Resources, Ramelius, Telix, & Transurban shares are falling

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The tech sector is home to a number of companies with strong growth potential.

Three that are highly rated are listed below. Here’s what you need to know about these tech shares:

BetaShares Global Cybersecurity ETF (ASX: HACK)

The first ASX tech share to look at is an ETF that provides investors with easy access to a large number of growing tech shares. The BetaShares Global Cybersecurity ETF is focused on the global cybersecurity sector. This means you’ll be buying some of the biggest and brightest companies in the sector such as Accenture, Cisco, Cloudflare, Fortinet, Okta, Splunk, Zscaler, Crowdstrike. Given the rising threat of cyber attacks, demand for their services is expected to grow strongly over the 2020s.

Bigtincan Holdings Ltd (ASX: BTH)

Another tech share to look at is Bigtincan. It is a fast-growing sales enablement platform provider. This popular platform enables sales, service and marketing teams to drive the sales process with the best  sales content anywhere, anytime, and on any device. Bigtincan has also just strengthened its offering with the acquisition of US-based Brainshark. It is an industry-recognised and multi-awarded leader in its field of sales coaching, learning and readiness. Management expects this to lead to combined ARR of $119 million in FY 2022, which will be up 124% year on year. Morgan Stanley is very positive on the company. It has an overweight rating and $2.10 price target on its shares.

Nitro Software Ltd (ASX: NTO)

Another tech share to look at is Nitro. It is a fast-growing document productivity software company. It has been tipped to grow strongly in the future thanks to the increasing popularity of its Nitro Productivity Suite and its sizeable market opportunity. The Nitro Productivity Suite provides integrated PDF productivity and electronic signature tools to customers through a horizontal, software-as-a-service, and desktop-based software solution. Its total addressable market is estimated to be $28 billion. The team at Bell Potter are positive on the company. The broker currently has a buy rating and $4.00 price target on Nitro’s shares.

The post 3 stellar ASX tech shares to buy right now appeared first on The Motley Fool Australia.

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• Own BetaShares Global Cybersecurity ETF (ASX:HACK)? Here’s what you’re invested in

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended BETA CYBER ETF UNITS and BIGTINCAN FPO. The Motley Fool Australia owns shares of and has recommended BETA CYBER ETF UNITS and BIGTINCAN FPO. The Motley Fool Australia has recommended Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Lithium Australia NL (ASX: LIT) share price is powering ahead during mid-afternoon trade today. This comes as the lithium company provided an update on its negotiations with Bunnings Group Limited (Bunnings).

At the time of writing, the lithium company’s shares are up 6% to 13 cents.

What did Lithium Australia announce?

In a statement to the ASX, Lithium Australia advised that Envirostream and Bunnings have signed a supply of services agreement. Lithium Australia holds a 90% interest in on-shore battery recycling company, Envirostream.

The deal will see the collection of spent batteries from Bunnings stores in Australia and selected stores in New Zealand. This follows the successful trials of spent-battery collection services in several Bunnings stores within Victoria.

Notably, the agreement comes ahead of the launch of the Battery Stewardship Scheme (BSS). Australia’s Battery Stewardship Council (BSC) is planning to roll out the initiative in early 2022. It is expected to continue until June 30 2024, with Bunnings given the option to extend the agreement for a further 12 months.

In addition, Envirostream will provide a Battery Product Stewardship program at all relevant sites across Australia and New Zealand. This will cover all the requirements of the BSS for managing every type of battery. As such, the services are listed below:

• Provision and maintenance of suitable collection units for spent batteries;
• Collection and transportation of spent batteries from all Bunnings sites;
• Recycling of the spent batteries collected from Bunnings sites;
• Education and participation in marketing campaigns, in conjunction with Bunnings, and
• Reporting.

Recently, the Australian Federal Department of Agriculture, Water and the Environment issued Envirostream with a Basel Import Permit. This allows for the import of 100 tonnes of mixed-waste batteries into Australia from New Zealand.

The permit authorises Envirostream to service the Bunnings’ New Zealand stores, which is valid until October 14, 2022. Once imported into Australia, the waste will be recycled at Envirostream’s EPA-licensed Campbellfield facility and Laverton North facility. The latter is currently in development.

Management commentary

Lithium Australia managing director Adrian Griffin commented:

The Company is pleased to announce that Envirostream will commence a service contract with Bunnings, which is leading the way in the provision of convenient collection points for spent batteries ahead of the BSS.

The creation of such a collection infrastructure is vital to improving Australia’s battery recycling rate and preventing spent batteries from being consigned to landfill.

Lithium Australia share price summary

Over the past 12 months, Lithium Australia shares have surged nearly 160%, with year-to-date up more than 100%.

Lithium Australia commands a market capitalisation of roughly $132.38 million and has close to 1 billion shares on hand.

The post Lithium Australia (ASX:LIT) share price leaps 6% on Bunnings update appeared first on The Motley Fool Australia.

More reading

• ASX lithium shares mixed on Tuesday as prices surge to all-time highs
• Why the Lithium Australia (ASX:LIT) share price is rocketing 9%

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a strong gain. At the time of writing, the benchmark index is up 0.75% to 7,429.6 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are sinking:

Beach Energy Ltd (ASX: BPT)

The Beach share price is down 5% to $1.42. This follows the release of a disappointing first quarter update from the energy producer this morning. According to the release, Beach’s first quarter production was down 4% on the prior quarter to 5.7MMboe. This was driven largely by natural Western Flank oil decline. Also disappointing the market was Beach reporting an 8% decline in sales revenue to $388 million despite rising oil prices.

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price has fallen 5% to $21.61. This follows the release of a trading update at its annual general meeting. According to the release, Flight Centre’s sales reached 27% of pre-COVID levels globally during September. This is still not at a level that makes its operations breakeven, leading to a monthly net operating cash outflow of $41 million. In response, Goldman Sachs commented: “Overall, while the outlook remains positive and corporate progress is encouraging, the update remained lacklustre on leisure.”

Tyro Payments Ltd (ASX: TYR)

The Tyro share price is down 2.5% to $3.94. This morning the payments company revealed that class action proceedings have been filed in the Federal Court of Australia. These proceedings allege, among other things, misleading and deceptive conduct by the company. Tyro, which has yet to be served the documents, understands that these proceedings relate to the terminal connectivity incident in January.

Whitehaven Coal Ltd (ASX: WHC)

The Whitehaven Coal share price has tumbled 8% to $3.05. This appears to have been driven by a pullback in coal prices overnight. According to CommSec, the thermal coal price fell 3.9% to US$229.90 a tonne. In other news, this morning Morgans retained its add rating and increased its price target to $3.92.

The post Why Beach, Flight Centre, Tyro, and Whitehaven Coal are dropping appeared first on The Motley Fool Australia.

More reading

• Tyro (ASX:TYR) share price tumbles after being hit with class action
• Why the Whitehaven Coal (ASX:WHC) share price is plunging 6% on Wednesday
• ASX 200 (ASX:XJO) midday update: Kogan jumps, Flight Centre sinks
• Why the Beach Energy (ASX:BPT) share price is tumbling 5% lower today
• Flight Centre (ASX:FLT) share price falls following Q1 update

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Tyro Payments. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and Tyro Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The New Hope Corporation Limited (ASX: NHC) share price is sliding into the red in afternoon trade and is now changing hands at $2.37, down 5.58%.

New Hope shares have been on the march down south over the past week, despite there being no market-sensitive information for the company in that time, or today.

Here we dive in to understand what’s fuelling this price action in the last few days.

What headwinds are in front of the New Hope share price?

Shares in the coal exploration and development company have come off a previous closing high of $2.67 on 11 October.

This came after a strong run from 20 September, when they broke out and reversed from a downturn that saw the company’s share price last bottom out at $2.06.

So it may come as a surprise to some as to why investors have instigated such an abrupt downturn in New Hope shares in the last few days.

In the absence of any market-sensitive information out of New Hope’s camp lately, we have to look to the underlying commodity markets to help explain this pricing activity.

One of, if not the main activity in New Hope’s repertoire is the exploration and development of coal in Australia, to which it produced 9.6 million tonnes in FY21.

The price of coal has soared over 300% in the single-year period to date, in line with broader commodity markets that are each running hot at the moment.

Coal pricing recently took off again at month’s end in September, spiking US$88/tonne or around 50% in roughly two weeks.

This most recent rally was extended by tightening supply and oversubscribed demand for the black rock, as wild storms forced the closure of around 60 coal mines in China’s most productive coal hub – Shanxi province – and freezing temperatures in China and Europe caused power plants to stock up on inventory to avoid deepening the energy crisis already in situ for both jurisdictions.

What does this mean for investors?

New Hope is an ASX resource share that produces a commodity – in this case, coal. As such, it is considered a price taker, that doesn’t really have much say on what markets it can sell into, and what prices it can command on its product.

That command is often determined by the forces of supply and demand, as has been explicitly observed in the coal markets lately.

Coal peaked at US$269.50/tonne on 5 October, before marching back down south to now trade at US$229.9/tonne. That’s a 14% dip in about 2 weeks.

In light of this relationship, coupled with the recent downturn in coal pricing over the past 15 days, we start to understand what might be weighing in on the New Hope share price.

The pricing weakness appears to have wrapped its tentacles around other ASX coal shares lately as well, with fellow coal heavyweights Whitehaven Coal Ltd (ASX: WHC) and Yancoal Australia Ltd (ASX: YAL) shares slipping 8% and 11.5% in the last week, respectively.

New Hope share price snapshot

The New Hope share price has climbed 68% this year to date, extending its run into the green by 109%.

These results have outpaced the S&P/ASX 200 index (ASX: XJO)’s return of around 19% in that time.

The post Why is the New Hope (ASX:NHC) share price sinking 5% on Wednesday? appeared first on The Motley Fool Australia.

More reading

• Here’s why the New Hope (ASX:NHC) share price is climbing 7% today
• Why Atlas Arteria, Baby Bunting, De Grey Mining, & New Hope are pushing higher
• Which ASX 300 shares are the biggest winners and losers on Tuesday?
• ASX 200 (ASX:XJO) midday update: APA makes AusNet bid, New Hope results impress
• New Hope (ASX:NHC) share price jumps on $337m profit turnaround

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Janison Education Group Ltd (ASX: JAN) share price is rocketing higher today. This follows comments from the company’s CEO regarding the digital transformation in the education sector today.

At the time of writing, shares in the online assessment and learning solutions provider are swapping hands for $1.08, up 14.89%. The Janison share price had been as high as $1.16 around midday. As a result, the company’s shares have now set a new 52-week high.

Education’s shift to digital

Investors are sending the Janison Education share price soaring on Wednesday. However, with no announcements out of the company, our eyes turn elsewhere for possible catalysts. One may be an article published by Digital Nation this morning where the Janison CEO talks about the COVID-19 induced digital shift within the education sector.

In the discussion, CEO David Caspari highlights the benefits of the digital transformation for students and teachers. As the fast-tracked movement changes the ways businesses operate, Caspari notes that educational continuity is another area in which digital tools can help.

Considering younger generations have grown up surrounded by technology, the sector is filled with people who are digital naturals. As such, Caspari believes that artificial intelligence could be used to free up time for teachers, resulting in better outcomes for students.

Speaking on the integration of digital solutions in education, Caspari said:

I talk to teachers and it’s a 24-hour profession, that is not sustainable and technology can help them. Artificial intelligence and our various other technologies can auto mark, can report and analyse on the assessments, all of these things save time for teachers that can be far better used, helping their students and driving teaching and learning outcomes.

Potentially exciting investors, the CEO also shared his belief that the changes inflicted by the pandemic will stick around. Specifically, he believes a hybrid education model of in-person and online is likely to stay.

Janison share price on the uptrend

Today’s positive movement only adds to what has been an incredible past year for the Janison Education share price. Riding the digital adoption trend, the company’s shares have catapulted 184% during the past 12 months.

While the company’s share price was rallying, so too was its revenue. In its FY21 full-year result, Janison reported a 38% increase in group revenue to $30.2 million. Despite this, it remains to be a loss-making business, losing $3.2 million in FY21.

Based on the current Janison share price, the company holds a market capitalisation of $258 million.

The post Janison Education (ASX:JAN) share price surges 18% as CEO spruiks permanent digital shift appeared first on The Motley Fool Australia.

More reading

• 4 ASX shares looking ripe for the picking now

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Janison Education Group Limited. The Motley Fool Australia has recommended Janison Education Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Reject Shop Ltd (ASX: TRS) share price is slipping today after the company’s CEO noted increased shipping costs and delays, caused by the global pandemic, likely won’t abate until the middle of next year.

In a speech published to the ASX ahead of the company’s annual general meeting (AMG),  Reject Shop CEO, Andre Reich states that inflated retail prices are being “managed carefully” in the face of higher shipping costs.

It’s bad news for those hoping COVID-19’s impact on businesses will end when Australia hits much-anticipated vaccine targets.

At the time of writing, the Reject Shop share price is $6.05, 1.63% lower than its previous closing price.

Let’s take a closer look at what the company’s leader noted in his AGM address.

COVID-19 disruptions continue for Reject Shop

The Reject Shop share price is down amid Reich’s comments that already inflated international supply chain costs have continued to increase in financial year 2022.

The company is facing ongoing challenges when trying to move goods through the Asia shipping lane. The shipping lane is being impacted by “several macro factors”, according to Reich. Those factors will likely continue beyond financial year 2022.

That means the company could face shipping costs that are $9 million higher than normal, as it did over financial year 2021. Or, the toll could be greater this financial year. Reich commented:

Unlike in [financial year 2021], most of these higher international supply chain costs have been factored into the company’s budget in [financial year 2022], however, they continue to increase.

The challenges might also affect the Reject Shop’s customers over the coming months. Particularly, as international shipping delays are further exacerbated once goods reach Australian ports.

That will likely lead to delays in products getting onto shelves. It could also mean in-store prices are upped to cover additional shipping expenses, as well as higher “raw material” costs.

Reject Shop share price snapshot

This year hasn’t been good for the Reject Shop share price.

It has fallen 11% year to date. It’s also 14% lower than it was this time last year.

The post Reject Shop (ASX:TRS) share price slips amid CEO’s supply warnings appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares that may be worth researching this weekend
• 3 beaten-up ASX shares that are exciting us: experts

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Electro Optic Systems Hldgs Ltd (ASX: EOS) share price is on the rise during Wednesday afternoon trade. This comes after the defence contractor provided investors with an update on its discussions with European space company OHB Systems AG (OHB).

At the time of writing, Electro Optic Systems shares are up by 2.25% to $3.64 apiece.

Electro Optic Systems secures contract

In today’s statement, Electro Optic Systems and its wholly-owned Unites States subsidiary, SpaceLink, advised that advanced negotiations have concluded with OHB. Their discussions related to the manufacture and launch of the initial constellation of four high-capacity optical relay satellites, announced last week.

Following the meeting, both Electro Optic Systems and SpaceLink have signed an “Authorization To Proceed” for the satellite manufacturing contract.

The total value of the agreement is expected to exceed US$300 million, subject to relevant terms and conditions.

OHB will be required to deliver four high-capacity relay satellites in Q1 2024. Payments for the work completed are to be based on the company achieving specific milestones over the 30-month term.

Electro Optic Systems noted that the OHB-manufactured satellites will include multiple subsystems and components. These include digital payload processing, electric propulsion, and state of the art optical inter-satellite links.

Furthermore, the four medium-earth orbit (MEO) spacecraft must meet United States cybersecurity requirements. SpaceLink is aiming to provide a secure transport layer for critical communications between the satellites and ground stations.

OHB intends to invest US$25 million into SpaceLink in the first tranche of financing for the project. It is anticipated that this will be in the form of a SpaceLink Pre- IPO Convertible Note.

Electro Optic Systems share price snapshot

It has been a difficult year for Electro Optic Systems shareholders with its share price tumbling by around 40%. The company’s shares reached a 52-week high of $6.92 late last year before positive investor sentiment wore off.

Electro Optic Systems commands a market capitalisation of more than $541 million and has approximately 151 million shares on issue.

The post Electro Optic Systems (ASX:EOS) share price launches on satellite manufacturing contract appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras owns shares of Electro Optic Systems Holdings Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Electro Optic Systems Holdings Limited. The Motley Fool Australia owns shares of and has recommended Electro Optic Systems Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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