JobStreet Corp Bhd (Jan 12, RM2.08)
Maintain hold with revised target price of RM2.40 from RM2.30: Hiring normally slows substantially towards the end of the year. We estimate 4Q11 will register 146,000 total job postings and RM28 million turnover (-2% year-on-year [y-o-y], -20% quarter-on-quarter [q-o-q]), compared with 3Q11 with 182,000 job postings and RM36 million turnover.
Net margin is also expected to soften to 30% (3QFY11: 32%) due to higher marketing costs and lower average selling price (ASP) due to competitive pricing. Separately, JobStreet had been consistently paying dividends in recent quarters, and we are expecting 2.65 sen dividend per share (DPS) in 4QFY11, in line with our 50% dividend payout assumption for FY11.
We remain conservative about the employment outlook in 2012, and expect JobStreet to register RM126 million revenue (-8% y-o-y) and RM43 million net profit (-9%) on the back of circa 589,000 job postings (versus 683,000 in FY11).
We do not expect the situation to be as bad as during the 2008/09 economic crisis, when FY09 sales fell to RM92 million (-10% y-o-y) with circa 396,000 job postings.
The drop in FY12 job postings and profit is mainly due to a higher base and profit margins in FY11 (as the economy rebounded and created higher employment opportunities). Nevertheless, FY12F revenue and job postings are still higher than FY09 and FY10.
We maintain our “hold” call for JobStreet with a revised discounted cash flow-based target price of RM2.40 (from RM2.30).
Downside risk will be supported by an expected 50% dividend payout. Seek’s 80% stake in JobsDB (JobsDB has 20% put option) and 22% stake in Jobstreet may pave the way for an M&A. Based on the last transacted pricing of 22.1 times enterprise value per earnings before interest, tax, depreciation and amortisation (EV/Ebitda) for JobsDB, Jobstreet is worth RM3.50 per share. — HwangDBS Vickers Research, Jan 12
This article appeared in The Edge Financial Daily, January 13, 2012.
Maintain hold with revised target price of RM2.40 from RM2.30: Hiring normally slows substantially towards the end of the year. We estimate 4Q11 will register 146,000 total job postings and RM28 million turnover (-2% year-on-year [y-o-y], -20% quarter-on-quarter [q-o-q]), compared with 3Q11 with 182,000 job postings and RM36 million turnover.
Net margin is also expected to soften to 30% (3QFY11: 32%) due to higher marketing costs and lower average selling price (ASP) due to competitive pricing. Separately, JobStreet had been consistently paying dividends in recent quarters, and we are expecting 2.65 sen dividend per share (DPS) in 4QFY11, in line with our 50% dividend payout assumption for FY11.
We remain conservative about the employment outlook in 2012, and expect JobStreet to register RM126 million revenue (-8% y-o-y) and RM43 million net profit (-9%) on the back of circa 589,000 job postings (versus 683,000 in FY11).
We do not expect the situation to be as bad as during the 2008/09 economic crisis, when FY09 sales fell to RM92 million (-10% y-o-y) with circa 396,000 job postings.
The drop in FY12 job postings and profit is mainly due to a higher base and profit margins in FY11 (as the economy rebounded and created higher employment opportunities). Nevertheless, FY12F revenue and job postings are still higher than FY09 and FY10.
We maintain our “hold” call for JobStreet with a revised discounted cash flow-based target price of RM2.40 (from RM2.30).
Downside risk will be supported by an expected 50% dividend payout. Seek’s 80% stake in JobsDB (JobsDB has 20% put option) and 22% stake in Jobstreet may pave the way for an M&A. Based on the last transacted pricing of 22.1 times enterprise value per earnings before interest, tax, depreciation and amortisation (EV/Ebitda) for JobsDB, Jobstreet is worth RM3.50 per share. — HwangDBS Vickers Research, Jan 12
This article appeared in The Edge Financial Daily, January 13, 2012.
