Let's take a look at what the integrated logistics provider reported.

What did Wiseway report?

The Wiseway share price is rocketing after the company reported a net profit after tax (NPAT) of $3.4 million, compared to a $4.9 million NPAT loss in H1 FY20.

Gross profit of $18.1 million represented an increase of 60% on the $11.3 million reported in the previous corresponding half.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) leapt to $6.5 million from $100,000 in the prior corresponding period.

Revenue increased by 54% year on year to $69.7 million. Wiseway reported inbound and outbound airfreight increased its trading revenue by 25% to $45.4 million, up from $36.2 million in H1 FY20. Its new business divisions revenue leapt 182% to $24.0 million, up from $8.5 million.

Commenting on the half-year results, Wiseway CEO Roger Tong said:

The results are a turning point for Wiseway which, since the IPO, has successfully implemented its strategy of diversifying our business and our income streams. At IPO, only 5% of our trading revenue was from new business divisions. These divisions are now responsible for 34% of our trading revenue…

This is a direct result of our FY20 investment in infrastructure and in our operating platform including bonded warehouses, accreditation for perishable operations and obtaining operational licences across Australia and New Zealand.

While the company has had to adjust operations to allow for the pandemic, Tong said that COVID-19 has seen its Australian and Asian customers approach Wiseway to help find solutions to the challenges of importing and exporting between the two continents.

Looking ahead, Tong said:

To accommodate future growth, we have opened a Business Support Office in Guangzhou, China. This new office is in addition to our Shanghai office. After the end of the reporting period, we identified Los Angeles in the United States as a suitable location for the Wiseway's next phase of expansion and establishing a presence in the United States…

Wiseway share price snapshot

With today's intraday gains factored in, the Wiseway share price is up by around 118% over the past 12 months. That compares to a 0.4% loss on the All Ordinaries Index (ASX: XAO).

Year to date, the Wiseway share price has gained around 53%.

The post Why the Wiseway (ASX:WWG) share price is storming 50% higher appeared first on The Motley Fool Australia.

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.

The post ASX stock of the day: Wiseway (ASX:WWG) shares rocket on 53% revenue bump appeared first on The Motley Fool Australia.