As coronavirus fears continue to grip the global economy, send markets deep into the red and see a global shutdown of mass gatherings, technology will play a vital role in keeping the world interconnected, whilst in isolation.
Panic buying has sent demand for healthcare products rocketing, leading to strong gains from medical product manufacturers but with the virus lifecycle set to lead to significant levels of self-quarantine, we look at three small cap tech stocks which are well positioned to capitlise on greater home quarantine activity as more businesses instruct their staff to work from home, and schools ask students to study from home.
Novatti Group (ASX: NOV)
Share Price: $0.10
Market Cap: $20 million
Novatti Group is a fintech company which specialises in payments processing, cross-border transactions and regulatory compliance.
The company’s flagship business is this payments processing business which delivered record revenues for the half-year ending 31 December 2019, its fourth consecutive quarter of revenue growth, and included revenues of $8.8m for FY19.
The business is underpinned by their payments technology which integrates with WeChat Pay and Alipay which are two of the most popular online payment platforms in China, ground zero for the COVID-19 outbreak. Beyond their integration into these hugely popular online platforms, Novatti has strategic partnerships in place with Bank of Shanghai, IBM World Wire, SendFX, SplitPay and Visa, with which Novatti holds Visa Principal Issuer status.
With coronavirus fears having sent populations into shutdown, online purchases become the primary source of buying, for which Novatti is a key intermediary in the processing of online transactions.
In line with heightened surveillance around anti-money laundering, Novatti’s tech can be easily integrated into other payment platforms for compliance and reporting purposes as evidenced by their recent partnership with Rent.com.au and soon-to-be launched digital banking service.
G Medical Innovation (ASX: GMV)
Share Price: $0.042
Market Cap: $20 million
G Medical is a medtech company which produces Prizma – a smartphone attachment which can monitor vital biometric health information of the user including heart rate, ECG, body temperature and stress levels.
Once attached to a phone, users can download an app which syncs with the biometric sensor which has been clinically tested and actively used in the United States. The company has also completed trials in China and awaiting regulatory approval but such a device would be highly effective in monitoring for key symptoms of COVID-19 which includes increased body temperature and fever.
With hysteria around the coronavirus outbreak, doctors have been inundated with patients which has led to entirely new hospitals built in China and specialist screening clinics around the world.
Doctors are under extreme pressure globally and an attachable device like Prizma is an effective way to monitor ongoing body temperature and whether there is a need to seek professional advice.
Family Zone (ASX: FZO)
Share Price: $0.095
Market Cap: $24 million
Family Zone is an education tech company which produces and manages software to assist children’s education, but is underpinned by cybersecurity measures.
One of their products, Classwize, is actively promoted by Google for Education and is an app which enables teachers to run their classes online.
The United States is a lucrative market for Family Zone which the company is actively pursuing and has achieved notable success with record revenues over the past 12 months from just a small sales team.
Under the U.S model for schools, all fall within a specific district which contains an average of 5.6 schools per district. With Family Zone signing districts on instead of individual schools, the opportunity for mass adoption is significant in the event the U.S sees a shutdown of schools due to coronavirus fears.
The country has already seen suspension to major sporting leagues NBA, MLB and NHL whilst also cancelling major crowd events Coachella and South By Southwest.
Considering how widely accepted homeschooling in the U.S is, Family Zone has offered its Classwize app to coronavirus affected schools. However, its overall suite of online education and cybersecurity products is much larger than Classwise which is well positioned to see significant adoption in the event of a schools shutdown.
*Any advice given in this article is general in nature and does not consider your personal circumstances.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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