There weren't too many ASX shares that did well in 2022 aside from businesses involved in energy, such as ASX lithium shares, ASX coal shares and Woodside Energy Group Ltd (ASX: WDS).
But, there were a handful outside of those sectors that have performed well this year and could see another strong year in 2023 if all goes to plan.
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Lovisa Holdings Ltd (ASX: LOV)
In 2022 to date, the Lovisa share price has risen by 14%, which I think is solid considering retailers are down, such as the Wesfarmers Ltd (ASX: WES) share price which has dropped by 23%.
This ASX share sells affordable jewellery which is targeted at younger shoppers. It saw exceptional net profit after tax (NPAT) growth in FY22, with a rise of 116.3% partly thanks to 59.3% growth in revenue. I think this shows the pleasing operating leverage that the business has.
FY23 has started off very well. Global comparable store sales for the first 19 weeks of FY23 were up 16.1% on FY22 for the year to date, with total sales for this period up 60% on FY22. This could signal another year of solid profit growth.
It continues to open new stores (with a net 47 added to 18 November 2022) and it has recently opened in new markets including Canada, Poland and Hong Kong. If it expands into mainland China, this could be a useful driver for earnings, which could then help the Lovisa share price.
According to Commsec, the Lovisa share price is valued at 32 times FY23's estimated earnings.
Webjet Limited (ASX: WEB)
In 2022 to date, the Webjet share price has gone up 13%. The business may be classed as an ASX growth share by some investors, but it has suffered significantly during COVID-19. But, now that demand is returning, the business is seeing profitability quickly return.
In the first half of FY23, the company saw a 223% increase in total transaction value (TTV) to $2.14 billion, a 217% increase in revenue to $175.7 million and a 557% rise of underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to $72.5 million.
There could be more recovery in the short-term because that first half showed that TTV was only 90% of pre-pandemic levels and underlying EBITDA was 69% of pre-pandemic levels.
The ASX share has done a lot of work on making WebBeds (the business to business travel segment) more profitable and efficient, which is why management expects this division to exceed pre-COVID profitability in FY23.
WebBeds is seeing strong demand – FY23 third-quarter bookings and TTV were tracking ahead of pre-COVID levels in mid-November.
Treasury Wine Estates Ltd (ASX: TWE)
In 2022, the Treasury Wine Estate share price has risen by around 8%.
This ASX share has a portfolio of wine brands, both cheaper and more expensive ones, which are sold around the world. TWE has done a good job of sending its wine to different markets after Chinese tariffs put up a large barrier to Australian wine going to Chinese consumers.
The Treasury Wine Estate share price remains over 20% below pre-COVID times. But, if Australian diplomatic efforts to reconnect with China go well, the wine industry could get a sizeable boost.
Just before Christmas, Foreign Minister Penny Wong visited China to re-engage with the Asian superpower. The ABC reported that "there would be further developments on various trade issues related to 'blockages'".
The positive case isn't just related to China – the long-term growth of the company in the rest of the world could still go well. But, it could be a big boost if China does start buying large quantities of wine again.
