2 top ASX shares I'd buy with $2,000

Here are 2 top ASX shares I'd want to buy for my portfolio with $2,000 including digital donation business Pushpay Holdings Ltd (ASX:PPH).

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There are some ASX shares that are really top quality picks for growth in my opinion.

If you're going to invest into the share market I think you should either go for a great exchange-traded fund (ETF), a great fund manager or quality ASX shares.

I don't think many ASX blue chips are worth investing in because they offer low growth potential. Names like Westpac Banking Corp (ASX: WBC) and Telstra Corporation Ltd (ASX: TLS) don't appeal to me.

However, businesses with good growth potential could be great opportunities. That's why, if I had $2,000, I'd be very happy to invest in these two ASX shares:

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is a digital giving business. It facilitates electronic donations to not-for-profit organisations such as churches. It is the large and medium US church sector that is driving Pushpay higher.

The ASX share is seeing enormous growth as more people donate to their church digitally rather than with cash. Pushpay gets a small slice of this donation. But it's a huge potential opportunity. Pushpay is aiming for annual revenue of US$1 billion over the long-term. In FY20 it grew its revenue by 32% to 'just' US$129.8 million, so there's a long way to go.  

One of the most exciting things about Pushpay is how scalable the business seems to be. Adding US$31.4 million of revenue to the business over FY20 saw the gross profit margin increase from 60% to 65%. That's a big increase in just one year. I'm not sure what the gross profit margin can be when it gets to US$250 million of revenue or US$300 million, but it seems it can go a lot higher.

The higher the gross profit margin the more revenue falls to the bottom line. The ASX share is aiming to at least double its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) in FY21 to US$50 million.

COVID-19 is causing a lot of pain around the world, but it's bringing forward the adoption of Pushpay. Before today's (likely negative) price movement, the Pushpay share price is valued at under 32x FY22's estimated earnings.

City Chic Collective Ltd (ASX: CCX)

City Chic is another ASX share with global growth aspirations.

The core City Chic business is very attractive. It has a large domestic store network and it has various partnerships in the northern hemisphere to sell products in North America and Europe. City Chic also has effective websites to sell its products.

City Chic has recently been acquiring distressed American competitors and turning them into online-only operations. This means the ASX share bought them at a cheap price, it keeps most of the client base and it lowers annual costs by closing the stores.

This isn't a typical Australian retail share. In FY20 it saw 65% of sales coming from online and 42% of global sales were from the northern hemisphere. This is good earnings diversification and City Chic offers plenty of growth. The northern hemisphere has a huge addressable market compared to Australia.

City Chic's recent US acquisitions of Avenue and Hips & Curves were smart. If it acquires Catherines then that could be another clever buy.

The ASX share could become a world leader in plus-size apparel for women if it can continue on its growth trajectory. In FY20 it grew sales by 31% to $194.5 million despite all of the COVID-19 difficulties.

I think that City Chic has a long growth runway, particularly with its powerful ecommerce offering. Before today's (likely negative) price movement, the City Chic share price is valued at under 23x FY22's estimated earnings.

Foolish takeaway

I really like both of these ASX growth shares for the long-term. I'd be very happy to invest $1,000 into each of them. Pushpay seems very scalable, so I'd buy it first – particularly if its share price falls further over the coming days and weeks.

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of PUSHPAY FPO NZX. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended PUSHPAY FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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