JOBST (0058) : JobStreet Corp - Looking for a new job
Target RM3.01 (Target: HOLD)
JobStreet’s 9M14 core net profit was ahead, forming 78% of our full-year forecast and consensus. However, if we take into account only its remaining assets following the disposal, its 9M14 core net profit would have fallen by 3.8% yoy to RM7.5m. The company completed the sale of assets to Seek Asia Investments for a revised RM1.9bn, after the Competition Commission of Singapore approved the transaction in Oct 14. The stock will go ex-deal on 10 Dec. We cut our FY14-16 EPS by 86-88% to account for the disposal of revenue-generating assets. We keep Hold with a higher target price of RM3.01, based on the combined book value of its remaining assets and dividend proceeds. We prefer GHL Systems for exposure to the domestic tech sector.
3Q14 highlights
JobStreet’s remaining assets’ core net profit rose 19.4% yoy to RM3.1m in 3Q14, after adjusting for a loan write-off for a JV partner in Thailand and losses in fair value of financial assets. The company also declared a special dividend of RM2.65/share from the proceeds of the disposal along with its third interim dividend of 1.75 sen; this brought the total FY14 dividend to RM2.70/share, which is ahead of our expectations.
Unlocking asset value
The Competition Commission of Singapore (CCS) granted its approval for the asset disposal in Oct 14. Under the deal, JobStreet sold all its assets in Jobstreet.com Pte Ltd, which comprise its operations in Malaysia, Singapore, Indonesia, Philippines and Vietnam, for a total consideration of RM1.9bn. Management said the rationale behind the asset disposal exercise was rising competition and an attractive opportunity to unlock asset value.
Still a decent value in remaining assets
Following the disposal, JobStreet still has some interesting assets with growth potential. For example, it has an associate stake in Taiwanese employment service provider, 104 Corp (3130 TT, Not rated), a 100% stake in Autoworld.my, an online car listings website, and some property assets. We value the remaining assets based on their book value, which implies RM0.36/share given the lack of information on the company’s earnings driver.
Source: CIMB Daybreak - 28 November 2014
Target RM3.01 (Target: HOLD)
JobStreet’s 9M14 core net profit was ahead, forming 78% of our full-year forecast and consensus. However, if we take into account only its remaining assets following the disposal, its 9M14 core net profit would have fallen by 3.8% yoy to RM7.5m. The company completed the sale of assets to Seek Asia Investments for a revised RM1.9bn, after the Competition Commission of Singapore approved the transaction in Oct 14. The stock will go ex-deal on 10 Dec. We cut our FY14-16 EPS by 86-88% to account for the disposal of revenue-generating assets. We keep Hold with a higher target price of RM3.01, based on the combined book value of its remaining assets and dividend proceeds. We prefer GHL Systems for exposure to the domestic tech sector.
3Q14 highlights
JobStreet’s remaining assets’ core net profit rose 19.4% yoy to RM3.1m in 3Q14, after adjusting for a loan write-off for a JV partner in Thailand and losses in fair value of financial assets. The company also declared a special dividend of RM2.65/share from the proceeds of the disposal along with its third interim dividend of 1.75 sen; this brought the total FY14 dividend to RM2.70/share, which is ahead of our expectations.
Unlocking asset value
The Competition Commission of Singapore (CCS) granted its approval for the asset disposal in Oct 14. Under the deal, JobStreet sold all its assets in Jobstreet.com Pte Ltd, which comprise its operations in Malaysia, Singapore, Indonesia, Philippines and Vietnam, for a total consideration of RM1.9bn. Management said the rationale behind the asset disposal exercise was rising competition and an attractive opportunity to unlock asset value.
Still a decent value in remaining assets
Following the disposal, JobStreet still has some interesting assets with growth potential. For example, it has an associate stake in Taiwanese employment service provider, 104 Corp (3130 TT, Not rated), a 100% stake in Autoworld.my, an online car listings website, and some property assets. We value the remaining assets based on their book value, which implies RM0.36/share given the lack of information on the company’s earnings driver.
Source: CIMB Daybreak - 28 November 2014
