Technology Charter: S&P/ASX All Technology Index - XRO, CPU, ALU, LNK, CL1, NXT

  • May 21, 2020 AEST
  • Team Kalkine
Technology Charter: S&P/ASX All Technology Index - XRO, CPU, ALU, LNK, CL1, NXT

On 21 February 2020, ASX, in association with S&P Dow Jones Indices, announced the launch of S&P/ASX All Technology Index. The intent was to get direct access to the fastest-growing sector in a single index. The index comprises of Australia’s 46 leading and emerging companies across a range of sectors.

 

Image Source: S&P DOW indices

 

The index was operational from 24 February 2020, opening at 2,101 points and closed at 2018.60. The sectors continued to follow a downward trend till 23 March 2020 and hit a low of 1,171.30 points, mostly influenced by the COVID-19 turmoil. From 24 March 2020, All Technology index back and has continued an upward trend. On 21 May 2020, the index, at AEST 12:08 PM was positioned at 1,945 points, up 0.39% from its previous close.

In this article, we would be looking at a few technology stars from the All Tech index and see how they have performed.

Xero Limited (ASX:XRO)

Xero Limited offers online accounting software for medium and small-sized companies.

The shares of Xero Limited which closed at AU$89 on 19 February 2020 reached AU$58.75 on 23 March 2020. From 24 March 2020, the shares started showing improvement in its share price. On 21 May 2020, the shares were trading at AU$79.705 (at 12:16 PM AEST), down 0.568% from the previous close.

Recent Update: FY2020 Results for the period ended 31 March 2020

On 14 May 2020, Xero announced its FY2020 results for the year ended 31 March 2020.

  • Operating revenue increased by 30% to NZ$718.2 million as compared to the previous corresponding period.
  • Monthly recurring revenue (annualised) grew 29% to NZ$ 820.6 million.
  • Total subscribers increased by 26% to 2,285,000
  • Net profit during the period was NZ$3.336 million.

 

Image Source: XRO's report

 

Computershare Limited (ASX:CPU)

Computershare Limited is a key player in share registration and transfer agency, employee equity plans, and stakeholder communications.

During the time frame from 20 February 2020 till 24 March 2020, CPU shares dropped from AU$17.40 to AU$8.60.  Post that, the shares have shown improvement in their performance. On 21 May 2020, the shares were trading at AU$12.770 (at 12:16 PM AEST), up 0.371% from the previous close.

Business Review

On 20 May 2020, the company provided its business update where it confirmed that its key business lines are solid and is performing as per the expectation after the period of unprecedented volatility and challenges.

  • In the present time, the company is working with its clients to provide them with high levels of service and digital solutions.
  • The company reported robust recurring revenues with encouraging trends in transactional and counter-cyclical activities.
  • CPU confirmed its Margin Income guidance to be ~US$180 million in FY2020 and ~US$100 million in FY2021.

 

Image Source: CPU's report

 

Altium Limited (ASX:ALU)

Altium Limited is an ASX-listed software company that focuses on the development of electronics design systems for 3D PCB design and embedded system.

ALU’s shares have shown a significant fall in its share price from AU$42.63 on 17 February 2020 to AU$24.67 on 23 March 2020. Post that the shares have started showing improvement in its share price. On 21 May 2020, the shares were trading at AU$36.400 (at 12:19 PM AEST), 0.248% above the previous close.

Business and Market Update

On 12 May 2020, ALU provided the business and market update. In the announcement, the company highlighted that the company is operationally and commercially well positioned in the present ongoing market situation because of COVID-19. However, it also is afraid that the prolonged restriction and the consequential economic, and social impacts, might impact its performance in Q4FY2020.

The announcement highlighted that ALU is financially healthy and profitable. The Company has a robust balance sheet with more than US$77 million in cash balance.

Link Administration Holdings Limited (ASX:LNK)

Link Administration Holdings Limited, the largest provider of services in Australia's superannuation administration industry, reported a significant fall in its share price from AU$6.43 on 20 February 2020 to AU$2.70 on 23 March 2020. The shares from 24 March 2020 started improving; however, the improvement was not that great. On 20 May 2020, the shares were trading at AU$3.810 (at 12:19 PM AEST), up 1.6%.

Recent Update on Company’s Operations at Macquarie Australia Investor Conference

  • The revenue profile of the company is diverse across jurisdictions & service offerings. More than 80% of the revenue is recurring in nature, offering resilience.
  • Its 1H FY2020 revenue, 59% of the revenue is from the APAC region while the remaining 41% from the APAC region.
  • Some areas of its business are adversely impacted because of market volatility.
  • LNK has withdrawn its guidance due to market volatility.

 

Class Limited (ASX:CL1)

Class Limited offers cloud-based admin software for self-managed super funds in Australia. From 14 February 2020 till 23 March 2020, the company witnessed a drop in its share price from AU$2.08 to AU$0.92. Post that the shares showed improvement till 8 April 2020 and then almost traded flat on ASX till 19 May 2020.

On 21 May 2020, the shares were trading AU$1.385 (at 12:20 PM AEST), up 2.593% from the previous close.

Recent Update: Investor Day presentation

In the Investor Day presentation released by the company on 13 March 2020, the company provided its strategic overview along with the investment highlights. Its strategies include:

  • Growing the core SMSF market share.
  • Increasing lifetime value per client.
  • Growth in New Products & Markets.
  • Strategic acquisition and partnership opportunities.

 

For its future growth, the company would focus on:

  • Product Capability Development.
  • People Investment.

 

NEXTDC Limited (ASX:NXT)

NEXTDC Limited is engaged in the establishment, development, and operations of data centre facilities.

NEXTDC shares have shown significant improvement in its YTD performance by 45.33%. The shares dropped significantly during the period from 10 March 2020 till 16 March 2020. During this period, the shares dropped from AU$8.41 to AU$6.58. From 17 March 2020, the shares have shown significant improvement, and it reached AU$9.49 on 19 May 2020. On 21 May 2020, a drop of 0.423% was seen at 12:22 PM AEST with the shares trading at AU$9.410.

Recent Updates:

On 1 May 2020, the company announced that contracted commitments at the data centre facilities in Victoria had crossed 27 MW, an improvement of 6 MW. The contracted customer commitments, along with expansion option, is now around 60 MW.

On 5 May 2020, the company completed its Share Purchase Plan was successful in raising AU$191 million.

 


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