Cleantech stocks did it tough in Q1, but the sector is bouncing back

Very few ASX stocks were spared during the COVID-19 selloff in March, and Deloitte’s latest quarterly recap shows the cleantech sector didn’t escape the pain.

The Deloitte Australian CleanTech (DACT) Index fell by 21.1 per cent in the March quarter, slightly outperforming the ASX200 which fell by 24 per cent.

The Index is comprised of 92 ASX stocks categorised under five sub-sectors: Energy Storage, Sustainable Minerals, Waste, Water and Renewable Energy.

This table highlights their relative performance in the March quarter, and the last 12 months:

Over the three months to March 31, just four of the 92 companies on the list recorded a share price increase.

And those gains were led by niche small-caps, which were buffeted from the macro forces that dragged the broader market lower.

Gains were led by clean-tech development company Aeris Environmental (ASX:AEI), which develops a number of products in fields such as energy efficiency, air quality and food safety.

The stock posted a gain of 59.4 per cent for the three months to March. The only other cleantech winners for the quarter were:

Windlab (ASX:WND) — +30 per cent
Orbital Corp (ASX:OEC) — +20 per cent
Kalina Power (ASX:KPO) — +3.3 per cent.

By contrast, eight companies posted price falls of more than 50 per cent.

But like the rest of the market, cleantech wasn’t left behind in the market rebound in April, when stocks posted their biggest monthly increase in more than 30 years.

Sector leader Aeris started April by closing a $12m share placement at 43c per share to finance further expansion.

Since then, the stock has gone on another tear and is now trading above 70c — good enough for a year-to-date gain of more than 150 per cent.

Two other stocks on the winner’s list — Windlab and Orbital — have also climbed further since March 31.

However, for the companies on the receiving end of the March selloff (four stocks on the index fell by more than 70 per cent), investors remain wary despite the broader increase in risk appetite.

Bluglass (ASX:BLG), BuildingIQ (ASX:BIQ) and Buddy Technologies (ASX:BUD) have failed to rebound off their lows so far in the June quarter, while Graphex Mining (ASX:GPX) remains in an extended trading halt.

Looking ahead, Deloitte partner John O’Brien is confident the cleantech sector will eventually rebound from the disruption caused by the pandemic.

He noted that over the last five years, the DACT index “still boasts a 24 per cent gain, compared to an 8.5 per cent loss for the ASX200”.

“Whilst the sector has been hit almost as hard as the total market, it will be interesting to see if there is a more rapid recovery in stock prices for the industries of the future over the next three-to-six months,” O’Brien said.