Why are these five ASX tech stocks worth your attention?

Summary

  • The S&P/ASX 200 Information Technology index has had a difficult 2021 after an impressive 2020, delivered a YTD return of -12.24%. However, a few tech stocks have stolen the show.
  • BrainChip started volume manufacturing of its Akida™ AKD1000 neuromorphic processor chip and was also included in ASX 300 index and the All Ordinaries.
  • Life360 signed a non-binding term sheet to acquire Jiobit.
  • Catapult reported a strong 16.5% growth in the ACV.
  • Codan signed a deal to sell 100% of the share in its 100% owned subsidiary Minetec.

2020 was an excellent year for the Australian technology sector. The tech space grew significantly as most jobs moved online with people operating from remote locations. However, the sector has witnessed a reversal in fortune, with the S&P/ASX 200 Information Technology index delivering a YTD return of -12.24% and the All Technology Index delivering a -6.45% return (as of 3 June 2021).

                       

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Despite the negative index performance, some tech players have performed admirably since the start of the year. A few tech high-flyers include BrainChip Holdings (ASX:BRN), Life360 (ASX:360), Alcidion Group (ASX:ALC), Catapult Group International (ASX:CAT), Codan (ASX:CDA), Dubber (ASX:DUB), EcoGraf (ASX:EGR).

In this article, we would walk you through these five companies and their significant developments.

BrainChip Holdings Ltd (ASX:BRN)

BrainChip Holdings Ltd, the leading ultra-low-power high-performance AI technology provider, delivered a YTD return of 39.53% (as of 3 June). During this period, the Company started manufacturing of the Akida™ AKD1000 neuromorphic processor chip for edge AI devices. Akida™ AKD1000 has the following features:

  • Micro to Mw Power Use
  • Real-time on-chip learning and training
  • TensorFlow Compatible
  • No CPU needed
  • On-Chip Convolution

In its AGM Presentation, BRN highlighted the growing scope of its chips. The Company would invest in the right processes and values for attracting and retaining the right people. It would also invest in other processors like AKD1000, AKD1500, AKD500, AKD2000, AKD2500, AKD3000 and AKD4000.

Outlook

  • BRN would transition from the R&D phase into Production and Sales.
  • Build a network of Design Partners and solution providers.
  • Driving Revenue by Licensing of the IP, chip sales, module sales and royalties.
  • Gaining market share in chip manufacturing and sales.
  • Tracking IP sales and large accounts.

Quarterly Rebalance

BrainChip successfully made its entry in S&P/ASX 300 index and the All Ordinaries in the March quarterly rebalance.

Do Read: Rising Demand for AI in healthcare: A Glance at BRN, OPL and LBT

Life360 Inc. (ASX:360)

Life360 Inc, the provider of location-based services application for consumers globally, delivered a YTD return of 56.05% (as of 3 June).

On 27 April, the Company announced that it signed a non-binding term sheet to acquire Jiobit for US$37 million. The total consideration can increase to US$54.5 million following certain performance targets are attained in the two full calendar years post the acquisition gets completed. Jiobit is the provider of wearable location devices for young children, pets, and seniors. The planned acquisition of Jiobit is the first step of Life360's strategic review.

The Company would continue to assess strategic & financial opportunities that will speed up progress towards its vision to become a leading platform for a much wider family services suite. The strategy  includes larger acquisitions and would focus on companies in the insurance vertical as the sector gets massive attention from investors in the US.

Catapult Group International Limited (ASX:CAT)

Catapult Group International Limited builds technologies to assist athletes and teams to perform to their maximum capacity.  CAT shares have delivered a YTD return of 14.82% and a 25.29% return in the last three months (as of 3 June).

On 26 May 2021, the Company released its FY2021 results (period ended 31 March 2021), reporting a 16.5% growth in the annualised contract revenue (ACV). In the APAC and EMEA regions, annualised contract revenue was 34% and 57%, respectively. In Performance and Health, ACV surpassed its pre-COVID-19 FY2020 growth, increasing from 12% to 32%.

Source: © Kentoh | Megapixl.com

Out of the total revenue generated by the Company, 79% was from subscription, up from 71% in FY2020. FY2021 was the second consecutive year of positive and growing Free Cash Flow.

INTERESTING READ: Three ASX shares looking strong in June

Codan Limited (ASX:CDA)

Codan Limited is an innovative technology company engaged in developing hardware, software, and embedded system products for challenging environments. The Company has delivered a YTD return of 64.04% (As of 3 June).

Recently, CDA signed a deal to sell 100% of the share in its wholly-owned subsidiary Minetec Pty Ltd to Caterpillar Holdings Australia Pty. Ltd for US$14 million and a volume-based earn-out over the subsequent five years. After completing the deal, CDA will offer manufacturing services to Caterpillar for up to five years to safeguard a successful transition and constant supply to Caterpillar clients.

Meanwhile, Codan confirmed that it reached an agreement to acquire 100% shares in US-based player Domo Tactical Communications from DTC Management Topco, LP for US$88 million. The acquisition is in line with CDA's strategic growth plan for its Tactical Communications business.

Dubber Corporation Limited (ASX:DUB

Dubber Corporation Limited, the world's leading cloud-based call recording and voice AI platform, delivered a YTD growth of 70.06% (As of 3 June). The Company made significant progress in its share price in the past three months.

On 03 June 2021, the Company announced that Cisco Webex Calling and Cisco Unified Communications Manager included Dubber call recording as a component of all Cisco Webex and UCM services. Also, it would not charge an additional cost for this from its users.

In Q3 FY2021, the Company reported strong growth of 20% in its annualised recurring revenue QoQ to AU$34 million [+158% compared to the previous corresponding period (pcp)]. Revenue increased by 54% to AU$6.6 million QoQ and 152% pcp. DUB’s users surpassed 380,000 counts during the quarter.

INTERESTING READ: Here’s why Dubber (ASX:DUB) shares hit an all-time high today

Stock Information (As of 3 June 2021)

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