THE YIELD: Are ASX-Listed Companies Living Up to the Hype?

Natasha Sholl By Natasha Sholl | 21 Jul 2021

What does the noticeable change in the last day tell us about market sentiment? And has the consumer shift online translated into investor confidence when it comes to ASX-listed e-comm companies?

When Sydney went into lockdown, we saw companies such as Kogan and Temple & Webster receive a little share-price bump. It makes sense that at a time when a massive population of shoppers were given ‘stay-at-home’ orders, the ASX would find favour with companies that would benefit from consumers spending more from the comfort (or discomfort) of their own homes. But this hasn’t necessarily been a trend we’ve seen continue across the board.

Despite the mid-July spike, Kogan has shed 11.2% over 90 days rather than experiencing solid growth over the last three months. In contrast, Temple & Webster managed to record 9% growth over the same period. Closing out at an impressive $11.25 on Tuesday (from $10.61 on Monday), this is a noticeable change in 24 hours. Another shift in the last day? Adore Beauty dropped from $5.20 to $4.94 from close of Monday to close of Tuesday. No announcements have yet been made that would seem to account for these significant one-day changes. Has there been an unknown trigger or is it market sentiment ahead of full year financial reporting?

MyDeal and Redbubble have continued to disappoint, dropping in share price by 28.4% and 27.1% respectively over 90 days. So why are investors losing faith? Is there a feeling that the digital market is oversaturated? Is there only room for a few major players? At the moment it’s too soon to tell. 

Power Retail Australian Listed E-Comm Index, based on ASX reporting

Perhaps surprisingly in the current climate, ASX-listed e-commerce companies are underperforming at -4.3% compared to the ASX 200 at 3.6% over the last 90 days. 

Given the extent to which we know that consumer behaviour has been forever altered and shoppers are heading online like never before, it’s interesting that investors aren’t necessarily throwing their support behind e-commerce companies.

The 4.3% decline over 90 days would have been far worse, if not for some of the major players bringing the average up. Bike Exchange has been fairly steady, hovering around the $0.22 mark with slight movement up and down over the last few months, yet this has all accounted for 12.8% growth over 90 days. In contrast to this steadiness, Cettire has been quite volatile, but has landed at $2.18 at close on Tuesday, representing an impressive 24.6% growth over 90 days. Yet with a -15.8% dip over 14 days, it’s still unclear whether Cettire will recalibrate after its June trading halt.  

Booktopia too has experienced 2.4% growth over this period, though the release of full year results may change this. “One other reason our share price may not be moving around too much is we are very illiquid. There are not enough shares available to trade at the moment. There is too much demand and very little able to be sold,” Nash told Power Retail last month. In September 2021 there will be shares coming out of escrow, so whether Booktopia continues to remain steady or subject to more swings remains to be seen.

Figures are current as at close of ASX on 20 July 2021. This is analysis only and not intended as investment advice.

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