Summary
- The pandemic has changed the fundamentals of the way businesses work across the globe which are expected to sustain for the coming years.
- Some of the emerging trends can be seen in the rapid technological adoption by the businesses to modernise the processes.
- Retailers are also expanding their horizon in the online space to capitalise on the traffic.
- Digital payment space has seen an inflection point this year and is expected to grow in the coming years in terms of the transaction value.
- Telecommunication and healthcare industries are also turning out to be emerging trends for the next year.
The COVID-19 pandemic has fundamentally changed the way businesses work across the globe. In order to survive these challenging times, the companies had to go an extra mile to figure out new ways, technologies and processes to do the business.
Unlike any other event in the past, the pandemic has been so impactful that these fundamental changes are expected to last for a few years, which might change the shape of some industries going forward. Amid see-sawing equity market trends, market participants may tap attractive stocks benefitting from these breakthrough trends.
Let's have a look at some of the trends that are making the headlines due to these changes and might continue in the next year as well, with the players making the most out this opportunity.
1. Information Technology
The technology space is a no brainer when it comes to the emerging trends during the pandemic. The IT space has played a vital role to help the businesses to transition to the digital space. Technologies that are powering the new “work from home” regime are proving to be a game-changer for many companies.
1. Dicker Data (ASX: DDR) is a technology hardware, software and cloud distributor and is driving Australia’s digital transformation. The company is the country’s largest owned distributor with $1.8 billion revenue in 2019 and has achieved a consistent top and bottom-line growth for 15+ years.
Dicker Data shares have provided a return of more than 150% since March dip.
2. Xero Limited (ASX: XRO) provides cloud-based accounting solution to small businesses and has a global presence with 2.45 million subscribers. With the accounting solution, the company delivers an entire ecosystem of apps for added functionality.
Xero has provided a return of almost 136% since March crash.
2. Online Retailers
The pandemic has put the e-commerce businesses at the forefront of the retail space. The accelerated shift in the consumer behaviour towards online retail space has forced many businesses to expand their online sales channels to capitalise on this newfound surge in traffic.
1. Kogan.com Ltd (ASX: KGN) is a leading consumer brand in Australia, having a diversified portfolio of retail and services businesses. The company’s technology and sourcing driven business model makes it one of the low-cost online distribution platforms.
Kogn.com has skyrocketed this year and yielded a return of more than 390% since March crash.
2. Temple & Webster Group Limited (ASX: TPW) is a leading online retailer for furniture and homeware. The company has expanded its digital capabilities like AI, AR to capture the online transition of customers. The company has already clocked an impressive 74% higher revenue in FY20, compared to pcp.
Temple & Webster Group has become the multibagger, notching up by more than 600% since March low.
3. Digital payment
The pandemic has been the key driver for pushing contactless payments. The current year is proving to be an inflection point for digital payment adoption across the globe. The sustained need for public hygiene at checkouts and digital push by the governments have all bolstered the segment.
1. Afterpay Limited (ASX: APT) is a financial technology company offering seamless online retail payment solutions for easy transactions. Recently, the company also started to offer savings accounts and cash flow tools to customers in its quest to expand the offered services.
Afterpay has delivered an eye-opening return of more than 1100% more from the March crash.
2. EML Payments Limited (ASX: EML) offers tailor-made payment solutions to brands and helps in the disbursement of payout’s, gifts, incentives and rewards. The company processes over $19 billion in gross Dollar volume (GDV) each year across 28 countries.
EML Payments has delivered a return of almost 210% since March dip.
4. Healthcare industry
Without a doubt, COVID-19 has put a severe demand pull for the global healthcare industry. This has set the industry to a path of rapid technological changes to better cater to the needs of the patients with increased online consultations, technology-driven personalised care etc.
1. Nanosonics Limited (ASX: NAN) is a disinfecting device manufacturer to improve the safety of patients and their clinical staff. The company manufactures trophon devices that generate a sonically activated, supercharged hydrogen peroxide (H2O2) mist which helps to kill fungi, bacteria and virus.
Nanosonics has delivered a stable return of around 60% since March low.
2. EMVision Medical Devices Limited (ASX: EMV) focusing on portable and cost-effective medical imaging devices using electromagnetic microwave imaging for the diagnosis. Recently, the company also released encouraging results from a pilot trial and was able to classify stroke type (ischaemic or haemorrhagic) with an overall accuracy of between 93.3% and 96%.
EMVision share price has surged up by almost 900% from March low.
5. Telecommunication industry
The saying ”data is the new oil” has been proven right during the pandemic. All the online transitioning in the space of retail, office work, cloud services, global connectivity etc. have all been riding on the back of data consumption. This unprecedented surge in data usage is expected to last for quite a long time.
1. Telstra Corporation Limited (ASX: TLS) has the largest market share of 44% in the 5G space in Australia and is also taking the rivals head-on in the 5G space. The 5G, being in its nascent stage, reflects a considerable growth potential in the coming future and Telstra has already started to monetise its network leadership.
Telstra share price has increased by 7.3% from March low.
2. Vocus Group Ltd (ASX: VOC) has a niche in providing fibre and network solutions. The company has a portfolio of well-recognized brands catering to enterprise, government, wholesale, small business and is all set for expansion in New Zealand via its upcoming IPO.
Vocus Group has clocked triple digit return of 137% from March crash.
