COVID-19 has caused a lot of damage to some ASX shares and a few industries as a whole.
Some businesses may be worth thinking about for the long-term as they are still feeling the impacts of those effects.
Travel and education could be two areas to look at for the longer-term.
At the current prices, these two ASX shares may be opportunities:
IDP Education Ltd (ASX: IEL)
IDP Education is a business involved in a number of areas of education: English language testing, student placement in Australia and other countries, English language teaching and digital marketing and events.
FY21 was a difficult year as it was completely impacted by COVID-19, whereas half of FY20 was unaffected by COVID-19. IDP Education’s FY21 net profit was down 42% to $39.5 million.
IDP Education noted that total student placement volumes were down 25% for the year, driven by travel and border restrictions. Placements to Australia were hardest hit, falling 40% compared to last year. But the UK reported a 4% increase in volumes as students travelled to the UK to commence studies.
FY21 English language testing revenue demonstrated its “through the cycle appeal” as volumes rebounded despite ongoing restrictions across its global network. The English language testing revenue grew $0.1 million to $325.6 million.
The ASX share pointed to its recent acquisition of the British Council’s English language testing operations in India, along with investments in digital marketing and the technology platform, which strategically position the business to grow its English language testing market share going forward.
Morgans is one of the brokers that likes IDP Education, with a price target of $31.25. The broker thinks English language testing volumes are now growing in FY22 with pent-up demand and the addition of the British Council India acquisition.
The broker reckons the IDP Education share price is valued at 53x FY23’s estimated earnings.
Corporate Travel Management Ltd (ASX: CTD)
Corporate Travel is one of the largest business travel companies in the world. It’s even bigger after its acquisition of Travel & Transport in the US.
It’s already seeing a recovery. When delivering its FY21 result, the company said that it had experienced a rapid return to positive underlying earnings before interest, tax, depreciation and amortisation (EBITDA). That recovery was led by the company’s increasing exposure to a recovery momentum in North America and Europe.
Whilst it made a full year EBITDA loss of $7.2 million, it made $13.6 million of positive EBITDA in that last quarter, representing a $19.1 million turnaround on the previous quarter. The ANZ region was profitable through FY21 despite the border closures.
The company’s balance sheet has no debt and it had cash of $99 million. The COVID-hit ASX share is targeting a return to dividend payments in the 2022 calendar year.
Corporate Travel believes it will be a much larger business after COVID-19 travel restrictions end. Management say the company is gaining market share in key markets, with North America and Europe currently generating around 80% of group revenue.
July 2021 delivered a record post-COVID revenue result, defying seasonal activity reduction in North American and Europe during the seasonal holiday period.
It’s currently rated as a buy by the broker Citi, with a price target of $26.06.