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3 ASX shares that will benefit from the reopening of borders

With vaccination rates ramping up across Australia, here are 3 ASX shares that will benefit from the reopening of borders. 

The end is finally in sight! With vaccination rates ramping up across Australia, here are 3 ASX shares that will benefit from the reopening of borders.

1. Qantas Airways Limited (ASX: QAN)

Thanks captain obvious. Of course, airlines will benefit from international borders reopening!

Correct, but Qantas will be a far better airline post-pandemic.

Its main competitor, Virgin is a shell of its former self since needing a private equity bailout.

Furthermore, the pandemic has given Qantas a reason to rebase its costs. It’s stripped out $650 million from its normalised cost structure by letting go of 9,400 staff, renegotiating commissions with travel agents and digitising operations.

The $650 million in savings only represents about 4% of its FY19 costs. However given the low-margin nature of the airline industry, stripping out $650 million in costs would have led to a 50% increase in FY19 profits.

The business is expecting to reduce a further $350 million in costs over the next two years, further improving profit margins.

Now you start to see why Qantas looks interesting.

2. Treasury Wine Estates Ltd (ASX: TWE)

It’s been tough sailing for Penfolds owner Treasury Wine. But it may just be time to purchase a couple of cases (or shares).

Given the company effectively lost its number one growth market in China, Treasury Wine did a stellar job seeking out profit growth in FY21.

With higher margin channels such as cellar door and restaurant sales yet to recover, the business has another leg of growth left in it. Additionally, it will benefit from duty-free sales when international travel resumes.

Moreover, when borders eventually reopen, spending on premium experiences should increase. And Treasury Wine will be a direct beneficiary.

3. Tyro Payments Ltd (ASX: TYR)

Tyro Payments will be a major beneficiary of reduced pandemic restrictions. The company provides payment services for small businesses predominantly in health (26%), hospitality (35%) and retail (25%).

It takes a clip of each transaction processed and therefore is leveraged to the activity of its customers.

All three core verticals have been impacted through either loss of elective treatments, dining restrictions or shopping closures.

Impressively, total transaction volumes (TTV) are still growing at 20% despite both Melbourne and Sydney being in lockdown.

When restrictions ease, I expect transaction volumes to further accelerate as life returns to normal.

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At the time of publishing, Lachlan does not have a financial or commercial interest in any of the companies or funds mentioned.
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