JOBST (0058) : JobStreet Corp - Special dividend goes ex
Target RM0.30 (Stock Rating: HOLD)
Jobstreet’s special dividend payment of RM2.65/share following the asset disposal completion to Seek went ex yesterday. Ex-special dividend, our target price falls to RM0.30, now based on 16.8x CY16 P/E, about a 30% discount to the IT services sector P/E of 24x. We maintain a Hold rating on the stock. While we see compelling value in Jobstreet’s remaining assets, we think that it will take a considerable amount of time for the company to expand these assets due to its limited market reach in the employment segment and strong competition in the automotive segment. Switch to GHL for better exposure to the tech sector.
What Happened
Jobstreet’s special dividend of RM2.65 went ex yesterday. Ex-special dividend, our target price falls to RM0.30. This is about a 17% discount to Jobstreet’s net asset per share of RM0.36.
What We Think
Although Jobstreet has completed the asset disposal transaction, it will still be involved with the business transition, as required under the Transition Service Agreement. We estimate that the transition process will last until end-1Q15. This could result in an overhang on Jobstreet’s share price in the near term, given the lack of visible growth strategy. Nonetheless, the group’s balance sheet position remains strong, with steady free cashflow generation and a net cash position of RM44m, or net cash per share of RM0.06 as at Sep 14. We expect Jobstreet to require minimal capex for expansion given its asset-light strategy, but management could take a longer time to grow the remaining assets given the strong market competition. One of Jobstreet’s remaining assets is Autoworld.my, an online car listings portal. We like its diversification beyond the employment segment, but think that the auto segment faces strong competition. The bigger car listing portals such as Carlist.my and Mudah.my have already captured the majority of the listings available.
What You Should Do
We maintain a Hold rating. While we see compelling value in Jobstreet’s remaining assets, we prefer to wait for better earnings visibility before turning positive on the company.
Source: CIMB Daybreak - 11 December 2014
Target RM0.30 (Stock Rating: HOLD)
Jobstreet’s special dividend payment of RM2.65/share following the asset disposal completion to Seek went ex yesterday. Ex-special dividend, our target price falls to RM0.30, now based on 16.8x CY16 P/E, about a 30% discount to the IT services sector P/E of 24x. We maintain a Hold rating on the stock. While we see compelling value in Jobstreet’s remaining assets, we think that it will take a considerable amount of time for the company to expand these assets due to its limited market reach in the employment segment and strong competition in the automotive segment. Switch to GHL for better exposure to the tech sector.
What Happened
Jobstreet’s special dividend of RM2.65 went ex yesterday. Ex-special dividend, our target price falls to RM0.30. This is about a 17% discount to Jobstreet’s net asset per share of RM0.36.
What We Think
Although Jobstreet has completed the asset disposal transaction, it will still be involved with the business transition, as required under the Transition Service Agreement. We estimate that the transition process will last until end-1Q15. This could result in an overhang on Jobstreet’s share price in the near term, given the lack of visible growth strategy. Nonetheless, the group’s balance sheet position remains strong, with steady free cashflow generation and a net cash position of RM44m, or net cash per share of RM0.06 as at Sep 14. We expect Jobstreet to require minimal capex for expansion given its asset-light strategy, but management could take a longer time to grow the remaining assets given the strong market competition. One of Jobstreet’s remaining assets is Autoworld.my, an online car listings portal. We like its diversification beyond the employment segment, but think that the auto segment faces strong competition. The bigger car listing portals such as Carlist.my and Mudah.my have already captured the majority of the listings available.
What You Should Do
We maintain a Hold rating. While we see compelling value in Jobstreet’s remaining assets, we prefer to wait for better earnings visibility before turning positive on the company.
Source: CIMB Daybreak - 11 December 2014
