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ASX growth shares have made something of a comeback in the past couple of months.
But many experts are still warning investors to buy those companies with solid numbers behind them rather than speculative pre-revenue businesses.
With this in mind, here are a couple of ASX shares that Cyan Investment Management holds that are growing spectacularly:
Melbourne games studio keeps churning out the hits
Cyan has been a longtime fan of electronic games developers Playside Studios Ltd (ASX: PLY).
After seeing the share price freefall 60% from February to June, the fund was pleased to finally see the unaudited full-year results last month.
“In FY22, Playside grew revenues 169% to $29 million, expanded its team considerably and has a spate of exciting game releases and milestones across FY23,” said the Cyan portfolio managers in a memo to clients this week.
“And, importantly, has a very strong balance sheet backed by almost $38 million in net cash.”
The ASX tech share has risen a stunning 54% since the June trough. But even after that, cash forms 33% of its market capitalization.
“The business continues to expand with a newly formed publishing division announced in late July.”
While the Melbourne company is not widely covered, both analysts surveyed on CMC Markets currently recommend Playside shares as a strong buy.
Cashing in on big-name clients jumping on a structural trend
Marketing technology provider XPON Technologies Group Ltd (ASX: XPN) is not exactly a household name yet.
But Cyan portfolio managers Dean Fergie and Graeme Carson are confident that it is serving in a space exactly where the business world is heading.
“We see this marketing technology business as a great way to gain exposure to the structural shift towards a requirement for businesses to build first-party (company-owned) data for digital marketing,” read their memo.
“The material move away from personal privacy threats such as website tracking 3rd party cookies continues to accelerate as Microsoft Corporation, Google and Apple Inc — along with independent providers like Brave, Firefox and Opera — tighten their browser security systems.”
Similar to Playside, Xpon shares halved in value this year until its June trough. Last month, Cyan welcomed its fourth-quarter financials.
“The most recent quarterly cash flow statement confirmed our confidence showing revenue growth of 134% year-on-year.”
The Xpon share price has rocketed 55% since June.
The company only listed in December, which was, in retrospect, terrible timing for a high-growth tech stock.
The Cyan team reckons it can only look upwards and onwards from here, armed with a stable of big-name clients.
“Xpon already delivers ARR [annualised recurring revenue] of $16 million (+78% YoY) and expects significant organic growth going forward,” read the memo.
“A relative newcomer to the ASX, we expect it to garner [the] attention of investors as revenue builds and new clients are signed up, adding to existing enterprise clients such as Domino’s Pizza Enterprises Ltd (ASX: DMP), Flight Center Travel Group Ltd (ASX: FLT) and Super Retail Group Ltd (ASX: SUL).”