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Since the turn of the year, things haven’t gone well for the world economy. The rapid spread of SARS-CoV-2 infection jolted the economy with the mass suspension of economic activities and the resultant layoffs and stand-downs of millions of employees worldwide. The stringent lockdown norms across the globe have brought the economies to a standstill.
The Australian economy, especially, was more affected than a lot on other nations as it had still not recovered from the impact of the 2019 bushfires before the COVID-19 pandemic led to the market turmoil. Every sector has borne the brunt of the infectious disease with a substantial decline in the performance of the sector indices. And just like the other sectors, the technology sector had to face the music as well.
However, every coin has two sides. While several tech businesses are struggling to stay afloat, some are thriving in the current scenario. Though companies are facing a shortage of raw materials, risks of inflation, and value chain interruptions, there are tech players who have gone ahead and moved their operations online. Under restricted human movement, remote working has taken the front seat.
Against this backdrop, let us look at three tech stocks that have beaten the odds and generated exceptional returns in the last month – WAS, OTW, EVS.
Interesting Read: 2020 Technology Drivers: Technology in Sports and Surfing
In this context, let us have a look at three technology stocks: WSP, OTW, EVS
Whispir Limited (ASX:WSP)
Incorporated in 2001, Whispir is a SaaS company which offers a communications workflow platform to its clients. The Company helps in the interactions between people and businesses.
WSP stock has been on a roller coaster ride since the beginning of 2020. The stock ended the day’s trade at $1.650 on 21 April 2020, an increase of 3.125% from its previous close. Whispir has generated a whopping 77.78% return in the last month.
Let’s look at the Company’s recent activities:
Impressive Q3 FY20 Performance:
Whispir reported its third-quarter results for FY20 with a 10.4% increase in its annualised recurring revenue (ARR) to $40.5 million. Below are the highlights:
- Forty-nine net new customers (record growth) and increased use of the platform by current customers.
- Net cash utilised in operating activities down to -$1.4 million compared to 1$1.2 million in the previous quarter.
- Customer cash receipts (quarterly) of $9 million, consistent with the estimates
- Reaffirmed FY20 prospectus forecast
COVID-19 Update:
On 17 March 2020, the Company assured that its prospectus forecast for FY 2020 is on track. Additionally, WSP mentioned that being a technology company, most of its clients were seamlessly using its platform. The client companies were communicating business information to their stakeholders during the lockdown period due to COVID-19.
The execution of business continuity plans during COVID-19 period are leading to increased use of the platform.
COVID-19 Strategy:
WSP has created 12 COVID-19 workflow templates which facilitate businesses to automate two-way communications to its stakeholders. By this, stakeholders can present across multiple delivery channels and in different geographical locations.
Whispir also implemented a joint go-to-market strategy with its partner Telstra and StarHub in Australasia and Asia, respectively. Telstra is providing ready-to-use templates of WSP to enterprises as part of its top five COVID-19 related business resilience solutions.
Government Interaction:
Whispir’s platform is used by the Victoria Department of Health and Human Services (DHHS) during coronavirus pandemic. Leveraging this platform, DHHS interact with Victorians who meets the criteria for self-isolation.
Through this service, DHHS can confirm whether the individual is obeying the mandatory 14- day self-isolation period for close contacts of the virus.
With the use of this data-driven and real-time communications, DHHS can have two-way messages interaction.
Over the Wire Holdings Limited (ASX:OTW)
An ASX-listed company, Over the Wire Holdings, helps businesses in simplifying the complexity with managing and integrating the IT & telco. OTW has been listed on the ASX since 2015. The Company provide four leading solutions: voice solutions, data networks solutions, security & IT support, and hosting solutions.
On 25 March 2020, the Company declared an interim dividend of 1.5 cents per share for the period ended 31 December 2019. The payment date for the distribution to shareholders was 07 April 2020.
OTW made specific changes to ensure that the businesses grow at a robust organic rate and continue to operate efficiently. On 31 March 2020, the Company updated the market about its organisational changes as follows:
- Mike Stabb, OTW’s Chief Financial Officer and Company Secretary moved into a new team. Mr Stabb will have a prime focus on M&A, new market, and new products opportunities.
- Simone Dejun, the Company’s General Counsel, took over the role of OTW’s Company Secretary effective 01 April 2020. Simone has a Master of Laws, Bachelor of Laws and a Bachelor of Business from the Queensland University of Technology.
With a strong financial background, the Company continued its survival during the hardships from coronavirus pandemic. OTW has performed substantially well under in the current challenging environment.
OTW stock ended the day’s trade at $3.070 on 21 April 2020, a decline of 5.538% from its previous close. Over the Wire has generated an impressive 51.87% return in the last month.
Envirosuite Limited (ASX:EVS)
An environment technology company, Envirosuite Limited offers a predictive, real-time, and diagnostic environmental management software.
EVS provides several solutions, such as blast management, environmental compliance, environmental intelligence, impact modelling, incident intelligence, risk management and source identification.
The EVS stock has shown a significant change in its return in the last one month. The stock ended the day’s trade at $0.130 on 21 April 2020, in line with its previous close. The Company delivered a negative return of 39.53% on a YTD basis. However, Envirosuite has generated a remarkable 51.87% return in the last month.
Contract wins in China:
As announced on 23 March 2020, EVS won an important material contract in China to supply the equipment for specialised water quality monitoring. Under this contract, Envirosuite will facilitate the equipment trade to the Chongqing Lianqing Instrumentation Co Ltd. The end-user is Chongqing Water Group Co. Ltd.
The value of the contract is $2.8 million, which entails equipment costs as well as EVS’s profit margin. The tenure of the contract is likely to be delivered and finished by the next 2-3 months.
The Company’s CEO mentions that after the coronavirus pandemic, China has elevated public health awareness and concerning issues specifically in water and air quality. Going forward, he mentioned that key growth driver for EVS as follows.
- Exploring China market
- Global wastewater industrial and mining sectors
- By leveraging broadened solution suite of EVS, cross-sell opportunities available across the newly expanded customer base.
Following the contract mentioned above, Envirosuite announced another contract win in China on 27 March 2020. The total worth of the new contract is $2.5 million. This contract signifies Smart Water solutions platform’s first commercial application. It aims to provide an end-to-end smart water platform for source-to-sea water modelling, monitoring and management.
This contract is part of the $4.4 billion Beijing-based AUD Xinfeng River Integrated Watershed Management Project. This comprehensive project is handled by the Hong Kong
-listed Beijing Enterprises Water Group Limited (BEWG) as the principal contractor. Beijing BHZQ Environmental Engineering Technology Co Ltd. is a majority-owned subsidiary of BEWG and has been contracted by EVS in China.
