ASX stock of the day: Wiseway (ASX:WWG) shares rocket on 53% revenue bump

Wiseway Group Ltd (ASX: WWG) is our ASX share of the day. Here's why the Wiseway share price is rocketing up today.

| More on:
forklift holding boxes next to upward trending arrow signifying share price lift

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Today, our ASX stock of the day is Wiseway Group Ltd (ASX: WWG). The Wiseway share price was going ballistic this morning, up 30.56% to 24 cents a share. Wiseway shares closed at 18 cents a share yesterday, but opened at 20 cents a share this morning before rocketing up even higher. The share price has retreated back to 20 cents at the time of writing.

Today has seen a new 52-week high for the company (24 cents), although Wiseway has had a highly volatile year on the ASX so far. The Wiseway share price got as low as 3.2 cents a share back in August, meaning any investor who bought in at those lows is now looking at a 650% gain today. However, Wiseway shares were trading as high as 46 cents a share back in November 2018, so this company hasn't exactly been a long-term winner so far.

But what does Wiseway do, and what is causing today's dramatic movement in the Wiseway share price?

What does Wiseway do?

Wiseway describes itself as "one of the leading forward freight companies in Australia", offering "extensive high-quality services for the whole Australia wide and globally".

Wiseway services all aspects of international forwarding and logistics, including air freight, sea freight, customs clearance, transportation, warehousing, distribution, and logistics solutions.

The company prides itself on offering its services at "economical costs". It does this by prudently outsourcing multiple facets of their business to keep expenses down, whilst still providing "all export and import related activities under one roof".

Why is the Wiseway share price rocketing today?

Wiseway released a trading update for the quarter ending 30 September to the ASX this morning before market open. The company told investors that, during the quarter, revenues were up 53% to $31 million. This was up $10.7 million from the prior corresponding period. The $31 million in revenue for FY2021 so far compares favourably with the total revenue of $102.6 million that the company banked in the entirety of FY2020.

The company reported revenue across 8 segments: Air freight, sea freight, perishables, airtruck road transportation, Airnex cargo sales agent, imports and distribution, New Zealand, and China.

China shipments fuel growth

The vast majority of these segments saw massive growth across the quarter. Chief amongst these was perishables, which exploded 576% from the 2019 quarter's revenue of $600,000 to the 2020 quarter's $4.2 million. Wiseway's largest segment, air freight, grew by 24% from $17.8 million in 2019's quarter to $22.2 million in the 2020 quarter.

According to Wiseway CEO Roger Tong, the company's surge resulted from "trade activity and transaction volumes from China, particularly via major e-commerce platforms". He added:

As an essential service provider during the COVID-19 pandemic, Wiseway has continued to operate its import and export services between Australia, and Asia. Wiseway's integrated service offering, through leveraging its relationships with key distribution partners, has enabled delivery of customers' cargo in and out of Asia via a combination of alternative routes.

On the growth in Wiseway's perishables division, Mr Tong said:

The standout was the stellar performance in our perishables business, of exporting fresh produce, live seafood, chilled seafood, chilled fresh milk and chilled meat… The market for imported fresh produce in China is seeing unprecedented growth in demand, for which Wiseway is perfectly positioned to deliver on.

Where to from here for Wiseway?

The company was quick to caution investors that the outlook for the rest of FY2021 was unpredictable, even though "demand for logistics services remains high". Of course, the company says it remains very bullish on the future, noting that its importing services for general cargo and e-commerce, now fully set up, are gaining momentum… up 182% on the previous year's quarter.

Overall, Wiseway's performance shows the positive impact the pandemic has had on certain industries, in this case, logistics. It will be interesting to see where the company goes from here.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

More on Share Market News

Two smiling work colleagues discuss an investment or business plan at their office.
Broker Notes

Which beaten down ASX 200 share did Goldman Sachs just upgrade to a buy rating?

The broker has become more bullish on this stock following last week's update.

Read more »

Hand holding Australian dollar (AUD) bills, symbolising ex dividend day. Passive income.
Best Shares

The best ASX shares to invest $1,000 in right now

Analysts think that putting your money into these stocks could be a smart move.

Read more »

green etf represented by letters E,T and F sitting on green grass
Share Market News

4 ASX ETFs to buy for FY25 and beyond

Could these ETFs be top options for investors looking for long term picks?

Read more »

A smiling woman sips coffee at a cafe ready to learn about ASX investing concepts.

How I'd invest $10,000 in ASX shares right now

I’m bullish about the prospects of these stocks.

Read more »

A fortune teller looks into a crystal ball in an office surrounded by business people.
Share Market News

What's the outlook for shares vs. property in FY25?

Generally speaking, there is optimism among the experts for both shares and property in FY25.

Read more »

Happy shareholders clap and smile as they listen to a company earnings report.
Best Shares

Top ASX shares to buy before earnings season

It's almost time to take a look at the books!

Read more »

sad party goer sitting alone after celebration
Share Market News

Here are the top 10 ASX 200 shares today

The ASX 200 had a horrible end to its trading week this Friday.

Read more »

A young female investor sits in her home office looking at her ipad and smiling as she sees the QBE share price rising
Broker Notes

3 ASX shares brokers tip for significant outperformance in FY 2025

Leading brokers expect some significant outperformance from these three ASX shares.

Read more »