Learn how to take advantage of industry trends and become a better investor

1. Sectors in Focus:
Technology & Retail
powered by www.wise-owl.com
Learn how to take advantage of industry trends

2. Disclaimer
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3. How to be a successful investor?
Have a well-
defined
investment
strategy
Know when to
sell
Be a proactive
learner
Risk
management
Patience
Acquire
knowledge
Strong
emotional
control Understand
and anticipate
trends
Persistence
Be positive but
critical
Accept that
there will be
losses
Learn from
mistakes
Don’t be afraid
to seek help
Financial
intelligence
Don't be afraid
to do the
opposite Move on from
mistakes
Diversification

4. Understand and anticipate trends
Invest in the future, not in the past
Enhanced Forecasting Ability
Understanding consumer trends
will enable you to identify great
investment opportunities. Failure
to plan is planning for failure.
Rebalance your Portfolio
The economy is an ever-evolving
marketplace. Ensure your portfolio is
exposed to long-term favourable
macro trends. Invest in the blue-chips
of tomorrow and cut your losses early.
Be Aware, Learn, Carefully Observe
A common trait of successful investors
is the ability to learn quickly. Always
observe the environment and try to
understand current trends, whilst
predicting future outcomes. An
investment in knowledge always pays
the best interest.

5. S&P/ASX 200 Sector Breakdown
as of 28 April 2017
Courtesy of www.au.spindices.com

6. Sector Snapshot: Information Technology (ASX:XIJ)
as of May 2017
Courtesy of www.marketindex.com.au
+3.5%
1 Year Return
Includes
• Software & Services
• Technology Hardware & Equipment
• Semiconductors & Semiconductor
Equipment

7. Sector Snapshot: Information Technology
When will Australia catch up to the rest of the world?
MARKET MOVERS – 12 MONTH PERFORMANCE
Codan Limited ASX:CDA +153%
Collaborate Corp ASX:CL8 +148%
Etherstack ASX:ESK +128%
Wisetech Global ASX:WTC +69%
Dicker Data ASX:DDR +48%
Bulletproof Ltd ASX:BPF -66%
Rewardle Hldgs ASX:RXH -81%
Urbanise.com ASX:UBN -83%
Building IQ ASX:BIQ -91%
Migme Ltd ASX:MIG -94%
• 12 month performance: +3.4%
• Mean market cap: ~$2.3 billion
• Smallest sector -~1.2% of ASX 200
• In the U.S. Information Technology is the largest sector making up
22.5% of the S&P 500
• The largest participant in the sector is Computershare (ASX:CPU)

8. Sector Snapshot: Consumer Discretionary (ASX:XDJ)
as of May 2017
Courtesy of www.marketindex.com.au
Includes
• Automobiles & Components
• Consumer Durables & Apparel
• Consumer Services
• Media
• Retailing
+6.8%
1 Year Return

9. Sector Snapshot: Consumer Staples (ASX:XSJ)
as of May 2017
Courtesy of www.marketindex.com.au
Includes
• Food & Staples Retailing
• Food, Beverage & Tobacco
• Household & Personal Products
+7.8%
1 Year Return

10. MARKET MOVERS – 12 MONTH PERFORMANCE
Nick Scali Ltd ASX:NCK +52%
Motorcycle Holdings ASX:MTO +37%
Invocare Ltd ASX:IVC +26%
Woolworths Ltd ASX:WOW +25%
Wesfarmers ASX:WES +14%
Harvey Norman ASX:HVN -10%
Myer Holdings ASX:MYR -20%
The Reject Shop ASX:TRS -70%
Surfstitch Group ASX:SRF -84%
Ahalife Holdings ASX:AHL -85%
Sector Snapshot: Retail
Long-term bear market approaching?
• Any company that sells products or services directly to consumers
• Traditionally these stocks can be found in ‘Consumer Staples’ and
‘Consumer Discretionary’
• Sub-industry group ‘Retailing’ has declined 18% year-to-date
• WO research indicates average return of -10.4% over 12 months
• Selloff in the past few weeks intensified amid looming Amazon entry,
TopShop failure, week retail sales data
• Industry challenges include: weak wage growth & rising household debt
• Long-term bear market approaching?

11. Importance of responding to industry trends
Case Study: Nokia vs Apple vs Samsung
• In 2007 Nokia controlled nearly
50% of the smartphone market.
• By 2013 – just 6 years later – the
market share had slipped to
around 3%
• Nokia admitted that it failed to
respond to industry trends.

12. Three trends to impact retail & technology stocks
Mobile Payments Social Commerce
Collaborative
Consumption
1 2 3

13. 1
Mobile Payments
Smartphone payments are skyrocketing
• In 2015, the mobile payments market reached a volume of approx. US
$75 billion
• Global mobile payments are expected to increase at 20% pa through
2024; the Chinese market is expected to increase 7 fold by 2019
• In the U.K. almost 50% of users feel comfortable buying high-value
items such as vacations or electronics
• Mobile wallets are expected to surpass the use of credit and debit cards
within the next 5 years
• Security remains a concerns for users and the industry – at the same
time it is an opportunity for companies to offer a secure, cost efficient
solution
Sources: BI Intelligence, Juniper Research, Reuters, WorldPay, Financial Times, in-house research

14. 1
Retail Technology Software Telcos Banks
Any company
that takes
payments
Mobile Payments
Which industries can benefit?

15. $4.00
$4.20
$4.40
$4.60
$4.80
$5.00
$5.20
$5.40
$5.60
$5.80
May-16 Aug-16 Nov-16 Feb-17
• Strong track record of
responding to industry trends
• Owns Paystation and Pay now,
growing 20%+ yoy
• Dominant market position in NZ
• TME offers profitable exposure
to online retail trends
1
On the forefront of retail and technology
Case Study: Trade Me Group (ASX:TME)

16. Reshaping online shopping behaviour
2
Social Commerce
• According to eMarketer, eCommerce sales in the United States will
grow to $491.5 billion by 2018.
• Social trends impact the customer decision making process
• Customers do not just read and write review but also share them with
friends
• Companies need to engage with clients on a social level
• Companies are thought leaders
• The importance of digital influencers is growing and companies can
work with influencers to spread brand awareness
 Social commerce is helping brands expand beyond the usual online boundaries.

17. $0.00
$0.05
$0.10
$0.15
$0.20
$0.25
May-16 Aug-16 Nov-16 Feb-17
• Breaking into the ‘digital
influencer’ space by utilising
existing technology
• Helping digital influencers to
generate income
• Monetise via direct and
relationship marketing
2
Case Study: Crowd Mobile (ASX:CM8)
Building a digital influencer network – is the company turning a corner?

18. Trusting strangers
3
Collaborative Consumption
• Collaborative consumptions refers to the ‘sharing economy’ or ‘peer to
peer economy’
• The core business idea involves unlocking the value of unused or under-
utilized assets
• A marketplace allowing consumers to get goods and services in more
efficient ways, without the need of owing them
• Pioneers of the sharing economy include: Airbnb, Uber
• In Asia-Pacific 78% willing to share and 81% willing to rent assets

19. • The company owns DriveMyCar,
MyCaravan and Mobilise – three
p2p sharing websites
• Identity verification platform –
PeerPass – helps to achieve a
claims loss ratio below industry
benchmarks
• One of the best performing tech
stocks on ASX, up 100%+ YTD
3
Case Study: Collaborate Corporation (ASX:CL8)
Case Study: Collaborate Corporation (CL8) – proven technology and strong partnerships
$0.01
$0.02
$0.03
$0.04
$0.05
Oct-16 Jan-17 Apr-17

20. Conclusions and discussion points
• Companies who fail to respond to industry trends will be left behind
• Industry trends often impact a number of sectors simultaneously
• Many companies attempt to take advantage of industry trends but not all will succeed
• Successful companies will find a way to use industry trends to their advantage whilst improving the customer
experience and/or their products and services
• Mobile payments, social commerce and collaborative consumption are three of many trends to impact many
sectors including retail & technology
• The retail sector is going through a structural change and negative sentiment may persist for some time
• The investable universe of technology companies in Australia is small but growth opportunities exist
Trends come and go but looking after clients will never be out of fashion

21. Thank you!
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