23. June 2021 | 10:40 CET
Deutsche Bank, Telekom, Aspermont: Here are the digitization winners
We now see in our everyday lives that digital solutions promise significant benefits: searching for a car-sharing vehicle or an electric scooter is only really fun with a smartphone. Many of the inconveniences of the Corona pandemic are also bearable, thanks to digital solutions. For example, the transmission of test results or proof of vaccination. Many traditional industries are also facing change thanks to digitalization. While large companies sometimes suffer from the change, small companies can gain market share. We outline three values.
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ISIN: DE0005140008 , DE0005557508 , AU000000ASP3
Deutsche Bank: Torn between the two
Deutsche Bank seems to have recovered from its low. After all, investment banking is yielding something, and the restructuring measures are also viewed positively by the market. Between 2016 and 2023, Deutsche Bank plans to send a quarter of its employees home. The reason for this is likely to be digitization: Today, even many older people no longer go to the counter for a bank transfer and do their banking from home. There are also fewer and fewer bank branches. As a result, bank employees are also no longer in as much demand as they used to be.
But the transformation to a digital bank is also proving difficult for companies like Deutsche Bank: innovative startups are setting new standards, for example, for checking accounts, but also for investments and loans. While these startups primarily want to grow, Deutsche Bank has to be profitable. Consequently, the bank cannot copy every new product directly or does it its own way. As a result, the products are usually more expensive and not quite as hip as the solutions from the startup forges. Thus, while Deutsche Bank is on a good path, it is also caught in the dilemma between innovation for customers and the desire to offer high-margin products. The latter is particularly difficult against the backdrop of the low-interest phase. The share is, therefore, not very promising.
Deutsche Telekom: Solid value, but...
Things look better for Deutsche Telekom. As a telecommunications provider, the Company is active in many exciting markets and, thanks to the acquisition of its US competitor, Sprint, generated revenue of more than EUR 100 billion for the first time in its history. Telekom generated three-quarters of this abroad - one more argument to see the share as a solid investment. Telecommunications providers are the utilities of the 21st century. If regional diversification is added, the business becomes very secure.
In addition, Telekom's systems business accounts for just over 3% of revenue but is of great value to the Company. In this way, Telekom pools know-how and is close to technological innovations. In 2020, some roaming charges fell away because of the pandemic, but the performance shows that the stock is very robust. Since the height of the pandemic, the stock has recovered and also offers a 4% dividend. The stock is a solid investment, but trees do not grow to the sky. If you want to give your portfolio a yield kick, you should look at other stocks as a complement.
Aspermont: Media company and solution provider
One such company is Aspermont. The Australian Company publishes Mining Magazine and Mining Journal, trade publications with a history of more than a century. Like many other media companies, Aspermont ran into problems a few years ago and turned its business around significantly. Now Aspermont is digital, offering webinars, digital trade shows and meetings, and climate change-related products, in addition to publications for industrial companies, farmers, or mining companies.
As recent figures have shown, customers embrace these new products and are also willing to pay money for them. In the first half of the current fiscal year, EBITDA climbed 193% to AUD 0.6 million and the gross margin improved by 63%. Because of the pandemic, these figures were very positively received by the market. The strong user growth, 32% p.a. over five years, indicates that this development will continue and is even expandable. In particular, the many new products on universal topics, such as climate change and ESG, should meet with lively interest. With its existing user base, Aspermont is also predestined to launch other products. The stock has stabilized around EUR 0.02 in Germany. Aspermont is a traditional company with an all-around digital profile that has achieved a turnaround. The expected growth could also benefit shareholders.