HSBC says buy these 31 global stocks that are exposed to the pandemic’s biggest tech disruptions and set to become growth engines of the future

“We can see this in the way people are behaving as employees (working from home), as students (online education), as consumers (e-commerce), when seeking entertainment (virtual events, e-sports), and when needing medical advice (e-medicine),” HSBC analysts wrote in a global research report.


  • HSBC asked its global analysts to examine four themes linked to digital disruption, which are connectivity, automation, experiential, and digital health.
  • The analysts outlined the opportunities corresponding to each of the four central areas of growth and highlighted 31 global stocks most suited to play the themes. 
  • Visit Business Insider’s homepage for more stories.

“Disruptive innovation” may sound like a pair of overused Wall Street buzzwords these days, but that’s only because of how quickly and overwhelmingly digital innovations have disrupted every aspect of life and become the new normal in 2020. 

“We can see this in the way people are behaving as employees (working from home), as students (online education), as consumers (e-commerce), when seeking entertainment (virtual events, e-sports), and when needing medical advice (e-medicine),” HSBC analysts wrote in a global research report. 

Meanwhile, companies seeking to achieve efficiencies and refine their business models for the new regime could very likely become the “engines of growth for tomorrow,” the analysts noted. 

As such, they examined four themes linked to global digital disruptions, which are connectivity, automation, experiential, and digital health. Based on the HSBC research note, the analyses of the four central areas of future growth are summarized below.

1. Connectivity 

Thanks to greater global connectivity than ever before, remote working, online learning, telemedicine, and virtual entertainment events have become normal parts of everyday life.

The new normal, which is accelerated by the coronavirus-induced lockdown, has benefitted obvious winners, namely, the Amazons and Netflixes of the world. 

But as more urban dwellers and businesses consider relocating to less expensive and more spacious areas, sectors such as building materials and construction, as well as the data centers and chip designers powering the greater connectivity, also stand to benefit. 

2. Automation 

Some investors might still think of robots working on the assembly line when it comes to automation, but the technology is now driven by a mixture of robotics, artificial intelligence, and sensors. 

In addition to increasing the efficiency of the supply chain management process, automation can help retailers improve their customer experience. It will also continue to make a big difference to logistic operators, where only 5% to 6% of warehouses and factories are currently automated, according to the HSBC note. 

3. Experiential 

As more shopping takes place online, the companies that understand how to engage customers virtually are more likely to gain market share over the long term. 

In the future, trends such as using artificial intelligence to generate personalized recommendations to customers and leveraging augmented reality to aid sales of personal care and cosmetics products will be front and center. 

4. Digital health

During the COVID-19 crisis, the world has already caught a glimpse of the massive opportunity that the digitalization of the healthcare industry could bring. 

But there is still only a limited number of companies around the world generating significant revenues from engaging in telemedicine and digital health. 

HSBC projects that the digital health/telemedicine industry is worth up to $250 billion annually in the US alone by 2025 and would potentially need 60,000 medical robots globally in five years’ time.

With each of the four themes intertwining with and also reinforcing the others, HSBC has asked its global analysts to highlight developed and emerging market stocks most suited to capitalize on the emerging trends.

The stocks, along with their corresponding themes and upside/downside forecasts (based on stock prices at the market close of 18 November), are listed below.

1. Taiwan Semiconductor Manufacturing

TSMC




Ticker: TSM

Theme(s) exposed: Relevant to all four themes 

Upside/downside: +20.7%

Source: HSBC

2. Drax Group

Drax




Ticker: DRX

Theme(s) exposed: Connectivity

Upside/downside: +8.4%

Source: HSBC

3. Segro

segro




Ticker: SEGXF

Theme(s) exposed: Connectivity

Upside/downside: +21.8%

Source: HSBC

4. Rakuten

rakuten




Ticker: RKUNY

Theme(s) exposed: Connectivity

Upside/downside: +37.2%

Source: HSBC

 

 

5. HeidelbergCement

heidelberg cement




Ticker: HDELY

Theme(s) exposed: Connectivity

Upside/downside: +33.4%

Source: HSBC

 

 

6. CRH

CRH




Ticker: CRH

Theme(s) exposed: Connectivity

Upside/downside: +11.5%

Source: HSBC

 

7. Tarkett

tarkett




Ticker: TKTT

Theme(s) exposed: Connectivity

Upside/downside:  +27.9%

Source: HSBC

 

8. Barratt Developments

barratt developments




Ticker: BTDPY

Theme(s) exposed: Connectivity

Upside/downside: +35.1%

Source: HSBC

 

9. Page Group

pagegroup




Ticker: MPGPF

Theme(s) exposed: Connectivity

Upside/downside: +12.9%

Source: HSBC

 

10. SThree

sthree




Ticker: STEM

Theme(s) exposed: Connectivity

Upside/downside: +16.7%

Source: HSBC

 


11. H&M

h&m




Ticker: HNNMY

Theme(s) exposed: Automation

Upside/downside:  

Source: HSBC

 

12. AP Moller Maersk

AP Moeller




Ticker: AMKBY

Theme(s) exposed: Automation

Upside/downside: +28.7%

Source: HSBC

 

13. Tesco

tesco




Ticker: TSCDY

Theme(s) exposed: Automation

Upside/downside: +28.6%

Source: HSBC

 

14. Deutsche Post DHL

Deutsche Post




Ticker: DPSGY

Theme(s) exposed: Automation

Upside/downside: +13.1%

Source: HSBC

 

15. Siemens

Siemens AG




Ticker: SIEGY

Theme(s) exposed: Automation

Upside/downside: +21.6%

Source: HSBC

 

16. Honeywell

Honeywell




Ticker: HON

Theme(s) exposed: Automation

Upside/downside: -0.6%

Source: HSBC

 

17. Alibaba

alibaba




Ticker: BABA

Theme(s) exposed: Automation

Upside/downside: +46.6%

Source: HSBC

 

18. Koh Young Technology

Koh Young Technology




Ticker: 098460

Theme(s) exposed: Automation 

Upside/downside: +6.4%

Source: HSBC

 

 

19. Asos

ASOS




Ticker: ASOMY

Theme(s) exposed: Experiential

Upside/downside: +29.3%

Source: HSBC

 

20. Burberry Group

Burberry




Ticker: BURBY

Theme(s) exposed: Experiential

Upside/downside: +40.8%

Source: HSBC

 

21. Global Fashion Group

global fashion group




Ticker: GFG

Theme(s) exposed: Experiential

Upside/downside: +34.4%

Source: HSBC

 

 

 

22. Nestle

nestle




Ticker: NSRGY

Theme(s) exposed: Experiential

Upside/downside: +17.2%

Source: HSBC

 

 

 

23. Puma

Puma




Ticker: PUMSY

Theme(s) exposed: Experiential

Upside/downside: +9.6%

Source: HSBC

 

 

 

24. SSP Group

SSP Group




Ticker: SSPG

Theme(s) exposed: Experiential

Upside/downside: +37.6%

Source: HSBC

 

 

 

25. Keywords Studios

keywords studio




Ticker: KYYWF

Theme(s) exposed: Experiential

Upside/downside: +21.4%

Source: HSBC

 

 

 

26. Team17 Group

Team17




Ticker: TM17

Theme(s) exposed: Experiential

Upside/downside: +29.0%

Source: HSBC

 

 

 

27. Tencent Holdings

Tencent




Ticker: TCEHY

Theme(s) exposed: Experiential

Upside/downside: +15.6%

Source: HSBC

28. PA Good Doctor

PA good doctor




Ticker: PANHF

Theme(s) exposed: Digital health 

Upside/downside: +33.3%

Source: HSBC

29. Netcare

Netcare




Ticker: NTC

Theme(s) exposed: Digital health

Upside/downside: +41.1%

Source: HSBC

 

30. Integrated Diagnostics

Integrated Diagonistics




Ticker: IDGXF

Theme(s) exposed: Digital health

Upside/downside: +40.3%

Source: HSBC

 

31. Dassault Systemes

Dassault Systems




Ticker: DASTY

Theme(s) exposed: Digital health

Upside/downside: -0.1%

Source: HSBC

 

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