‘Defence-tech’ is one of several ASX tech sectors that has boomed in 2020.

As COVID-19 first broke out it won favour due to its reputation as being ‘recession-proof’, and was further boosted by fresh government investment.

Last month, the Morrison government announced a $1 billion defence investment package, which includes a grants program for small businesses in this sector.

Here’s a list of all ASX defence-tech stocks and their performance over the past 6 months:

Code Name Price 6 Month % Return Market Cap
BRN BRAINCHIP HOLDINGS LTD 0.785 1644 $1.2B
OEC ORBITAL CORP LTD 1.13 143 $87.7M
ELS ELSIGHT LTD 0.55 95 $60.5M
CDA CODAN LTD 10.77 78 $1.9B
AJX ALEXIUM INTERNATIONAL GROUP 0.07 30 $44.4M
MOB MOBILICOM LTD/AUSTRALIA 0.094 25 $24.2M
XTE XTEK LTD 0.64 21 $45.2M
BIS BISALLOY STEEL GROUP LTD 1.045 19 $46.6M
BCT BLUECHIIP LTD 0.089 11 $53.4M
DRO DRONESHIELD LTD 0.18 0 $46.9M
EOS ELECTRO OPTIC SYSTEMS HOLDIN 5.45 -1 $794.9M
TTT TITOMIC LTD 0.695 -9 $108.8M
QHL QUICKSTEP HOLDINGS LTD 0.08 -12 $56.4M
UUV UUV AQUABOTIX LTD 0.0015 -25 $2.7M

 

The standout performer is an AI play BrainChip (ASX:BRN) which has built a computer chip that can mimic the human brain and sensory systems.

Its clientele includes law enforcement and intelligence organisations, which it helps identify patterns and faces in video footage.

The stock has really taken off in recent months, gaining over 1000 per cent as it edges closer to commercialisation.

Perth-based Orbital UAV (ASX:OEC) – which manufactures specialised two stroke engines for unmanned aerial vehicles (UAVs) – is another stock that’s well up, having more than doubled in 6 months.

The company turned a $5.9 million loss into a $1.7 million profit this year off the back of significant traction in global markets.

Major clients won this year this year include global aerospace giant Northrop Grumman, and one of the biggest defence companies in Singapore.

It is also keen to capitalise on local opportunities – hosting Minister for Defence Linda Reynolds back in July to discuss the applicability of its technology.

 

Communications & drone stocks win too

Companies that develop communications infrastructure and drone technology have been big winners.

Small cap Elsight (ASX:ELS) and large cap Codan (ASX:CDA) have excited investors in recent months with big name orders and are up 95 per cent and 78 per cent respectively.

The latter stock also sells metal detectors, including gold detectors and this has been a strong performing segment too. Codan announced a $64 million net profit after tax last financial year.

Drone tech stocks Xtek (ASX:XTE) and Mobilicom (ASX:MOB) enjoyed gains of 21 per cent and 25 per cent over the past 6 months respectively.

Last month, Stockhead spoke with both companies and they both noted the industry outlook looked stronger than it did pre-COVID.

This is because governments globally are ramping up their investment in defence as regulators become more flexible, allowing for a faster evolution of drone technologies.

At Stockhead, we tell it like it is. While Orbital is a Stockhead advertiser, it did not sponsor this article.