- Companies that implemented tech-driven strategies amid the highly volatile market scenario of 2020 have been the talk of the town. Market participants might look up to them in 2021 as well.
- Afterpay Limited, Kogan.com Ltd and Redbubble Ltd. have witnessed a staggering uptick in their share prices during 2020.
- These companies are moving ahead in 2021 with a solid growth plan and have identified several opportunities in the environment.
Technology played a considerable role in 2020 with businesses benefitting from adopting tech-driven innovative solutions during the pandemic. From plunging to all-time lows and rebounding to fresh highs, software developers, wireless providers, streaming services, HRTech companies, fintech companies, and cloud computing providers, among others, have witnessed a significant uptick despite the challenging environment.
Now that we are officially in 2021, market participants might look up to more growth in this area amid rapid digitisation of working, learning, shopping, and entertainment. ASX-listed technology-led stocks like Afterpay Limited, Kogan.com Ltd and Redbubble Ltd. have grown 290.99%, 154.63% and 460.87%, respectively over the year (as on 05 January 2021).
Let us look at these three stocks that have shown staggering growth in 2020 and might continue to interest market participants this year.
Afterpay Limited (ASX:APT)
Afterpay Limited has navigated through significant upheaval to attain crucial outcomes for its business and posted strong financial results during 2020. Moreover, APT has continued to ensure that regulators and policy formulators comprehend APT’s distinguished service, and the customer protections inherent in APT’s model.
The Company has significantly benefitted from the recent trend where consumers shifted towards online shopping and away from traditional credit to debit. This significant trend aided APT’s purposefully differentiated model and witnessed continuous growth and expansion during the uncertain COVID-19 time.
Q1 FY21 Performance (Source: ASX Announcement 17 November 2020)
Notably, the Company’s focus remains on Millennials and Gen Z and aims for long-term growth by meeting these customers’ dynamic needs. In FY21, APT looks to deliver on its strategy and accelerate its investment to enhance its platform while pursuing co-marketing opportunities and expanding its human resources.
Source: ASX Announcement 17 November 2020
In addition to this, APT also eyes to leverage from early mover advantage into new markets and expedite its expansion.
However, with growing opportunities, there are growing competition concerns for APT in the existing and new markets.
Kogan.com Ltd (ASX:KGN)
As a leading Australian consumer brand, Kogan.com Ltd witnessed notable growth amid times full of extraordinary challenges, disruption and difficulty like bushfires, drought, and the COVID-19 pandemic.
The Company achieved revenue growth of 26.4% in FY20 with gross sales soaring 71.2% in the second half of FY20 (vs the first half). KGN is optimistic about further growth in its existing businesses and its portfolio, including prospective merger and acquisition opportunities.
Lately, KGN acquired Mighty Ape Limited that is anticipated to propel the Company’s growth across Australia and New Zealand through enhanced customer offerings and improved infrastructure. This transaction offers immediate scale to Kogan.com’s operations across NZ and a significant opportunity to expand its product offering.
Source: ASX Announcement 03 December 2020
Overall, KGN expects an expansion in its Exclusive Brands portfolio business, continued expansion of its new verticals and scaling of the Kogan Marketplace in the coming times. Moreover, the strong balance sheet of KGN offers a suitably positioning to look for and capture merger and acquisition opportunities.
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Redbubble Ltd. (ASX:RBL)
Owner and operator of leading global online marketplaces, Redbubble Ltd. believes that 2021 is a year of opportunities. Given this backdrop, the Company is suitably positioned to capitalise on a decade of momentum and actively tapping the opportunity through a shift towards the online activity.
Along with this, the growing adoption of e-commerce platforms has compelled the Company to work across various fronts in 2021, including user acquisition and transaction optimisation, Customer understanding, loyalty and brand building, Artist activation and retention at Company level and additional physical product and fulfilment network expansion.
During 1Q FY2021, RBL has witnessed strong performance with marketplace revenue up 116% and gross profit up 149%.
RBL has recently appointed Michael Ilczynski as the CEO of RBL. Mr Ilczynski has a track record of helping SEEK grow into a global force driven by product evolution and scaling of the business. RBL anticipates benefitting from the recent appointment, believing that this is an appropriate move for the Company and various stakeholders.
Stock Price Movement
As on 06 January 2021 (at AEDT 1:16 PM),
- APT shares were trading at A$113.570, down 4.483%
- KGN shares were trading at A$19.050, down 3.837%
- RBL shares were trading at A$6.260, down 2.946%
With significant uncertainty looming over the pandemic’s duration and severity, investors might look to continue to reap the rewards from several ASX-listed tech-led companies in 2021. It shall be interesting to see how such stocks perform as uncertain times continue to persist.