Small Cap ASX Shares to Buy : Bell Potter's December Picks

2 min read | December 12, 2023 03:46 AM PST | By Team Kalkine Media

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In the dynamic landscape of small-cap investments, Bell Potter highlights two ASX-listed companies with promising potential: DroneShield Ltd (ASX:DRO) and GenusPlus Group Ltd (ASX:GNP). These companies, operating in the counterdrone technology and integrated services for the energy sector, respectively, have captured the attention of Bell Potter analysts who believe they present compelling investment opportunities. Let's delve into the reasons behind Bell Potter's positive outlook on these small-cap players, which fall within the category of ASX small cap stocks.

DroneShield Ltd (ASX: DRO):

Bell Potter expresses enthusiasm for DroneShield, a company specializing in counterdrone technology. Positioned in a market anticipated to grow to approximately A$11.5 billion over the next decade, DroneShield's products are designed to detect and counter small drones. The company is deemed well-placed amid the global trend of rearmament. Sales for the current year have demonstrated significant growth, with a projected revenue of $69.9 million, approximately four times the result from the previous year.
DroneShield is expected to achieve profitability for the first time, with a substantial sales pipeline of around $400 million. Key opportunities include the deployment of counter-drone technology across US military bases, a framework agreement exceeding $30 million with a European Government, and participation in an Air Services Australia tender for C-UAS technology across 29 airports. Bell Potter assigns a buy rating and a $0.50 price target for DroneShield shares.

GenusPlus Group Ltd (ASX:GNP):

GenusPlus, operating in the resources, power, utilities, and communications sectors, is recommended as another small-cap ASX share to consider. Positioned to benefit from increased investment in renewable power, battery energy storage, and transmission infrastructure on Australia's east coast, GenusPlus is expected to play a significant role in achieving decarbonization targets set by state and federal governments.
The HumeLink East project is anticipated to formalize this trend in transmission infrastructure investment, establishing the company as a tier 1 provider of contracting services for large-scale energy infrastructure. Bell Potter assigns a buy rating and a $1.50 price target for GenusPlus shares.

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