The Zicom Group (ASX:ZGL) share price shot up 128% today

The Zicom (ASX: ZGL) share price gained a whopping 128% today off the back of a $60 million new contract deal announced yesterday.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Zicom Group Limited (ASX: ZGL) share price has had an exceptional trading run today, closing 128% higher at 13 cents.

The Zicom share price blasted off the blocks this morning – even reaching a new 52-week high of 22 cents – off the back of a multi-million dollar deal announced yesterday.

Zicom Group is an integrated manufacturer of marine deck machinery, fluid regulating and metering stations, transit concrete mixers, foundation and geotechnical equipment and precision engineered and automation equipment. The company also provides production integration solutions and hydraulic system services. 

Why is the Zicom share price rocketing? 

Yesterday, Zicom announced a $60 million deal to design and supply LNG propulsion systems for several oil product tankers being built for a leading European oil tanker owner. The orders have been scheduled for delivery in 2022/2023.

The company cited this deal as a testament of its momentum to transform Zicom's marine sector. Zicom advised that it has been developing technology for green energy propulsion systems for ocean-going vessels over the past 3 years.

The company believes that this strategy now enables Zicom to expand into the entire shipping industry rather than only focussing on offshore marine applications.

Zicom also noted that demand in the offshore marine sector appears to be showing some positive signs.

New shipping regulations position Zicom for growth

The International Maritime Organisation (IMO), which is part of the United Nations, regulates international shipping.

According to Zicom's announcement, the IMO 2020 rules mandate ocean-going vessels to reduce sulphur emission from engines to 3.5%, down from 4.5%.

Meeting this mandate will require that vessels install scrubber filtration systems or use a low sulphur fuel in place of diesel. 

Each of these options will require technological updates which Zimcom believes the company can support. It therefore views the implementation of the new IMO 2020 rules as a strong growth opportunity.

Today's gains see the Zimcom share price recover from its trading lows over the previous 12-month period. Its shares fell from 12 cents last February to a low of 4 cents in the coronavirus market meltdown of March.

Motley Fool contributor Gretchen Kennedy 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.

More on Share Market News

Share Market News

Why Calix, Collins Foods, Myer, and Patriot Battery Metals shares are charging higher

The S&P/ASX 200 Index (ASX: XJO) is back on form and charging higher on Tuesday. In afternoon trade, the benchmark index…

Read more »

Man in yellow hard hat looks through binoculars as man in white hard hat stands behind him and points.
Opinions

Are Fortescue shares a contrarian buy after falling 20% in a month?

Are investors putting too much weight on the jitters of the market or is the Fortescue fall fair?

Read more »

A young woman wearing a blue and white striped t-shirt blows air from her cheeks and looks up and to the side in a sign of disappointment after the ASX shares she owns went down today
Share Fallers

Why DroneShield, Paladin Energy, Red 5, and Synlait shares are falling

These shares are having a tough time on Tuesday. But why?

Read more »

Man raising both his arms in the air with a piggy bank on his lap, symbolising a record high.
Bank Shares

Nine-year highs: NAB share price glides to highest level since 2015!

The bank has notched up another inflection point today.

Read more »

ANZ ASX 200 banks capital return Group of investors madly grabbing for cash on city street.
Healthcare Shares

ResMed shares rebounding as investors rush to buy the dip

ResMed is rising as ASX investors buy the dip following yesterday's 13% share price dive.

Read more »

A woman screams and holds her hands up in frustration.
Share Market News

Why is short interest in Sayona Mining shares growing?

Why won't short sellers leave this lithium miner alone?

Read more »

A woman in a bright yellow jumper looks happily at her yellow piggy bank representing bank dividends and in particular the CBA dividend
Bank Shares

CBA shares hit another new high! Too late to buy?

At today's new record price, CBA's market capitalisation is just $1 billion short of the ASX 200's most valuable stock,…

Read more »

A group of stockbrokers sit in a room with several computer screens in front of them as they discuss the Zip share price and Zip's merger with Sezzle
Broker Notes

Why these 3 ASX 200 shares just gained significant broker upgrades

The brokers just boosted their outlooks for these ASX 200 shares. But why?

Read more »