Stock Name: JOBST
Company Name: JOBSTREET CORPORATION BHD
Research House: HWANGDBS
JobStreet Corporation Bhd
(June 30, RM2.03)
Maintain buy at RM2.03 with a target price of RM3.30: Resumption of hiring as regional economies recover will continue to drive earnings momentum in 2Q2010. Malaysia, which commands more than 60% of group revenue, posted an average of 16,000 to 17,000 jobs per month on JobStreet's portal for April to June against 13,000 to 14,000 per month (+23% quarter-on-quarter) in January-March. Singapore also shows strong job posting sales of about 18,000 jobs currently, close to its all-time high, and higher than 1Q2010's 14,000 per month. 2Q2010 will also benefit from maiden associate earnings from 104 Corp, in which the group has a 20% interest.
Potential sales and market share gain with more marketing spends. JobStreet embarked on its aggressive marketing plan in April this year to build brand awareness mainly in Singapore. It plans to spend about 5% of sales in marketing, still a far cry from its major shareholder SEEK Ltd's 25%-30% of sales. JobStreet advertises in places with high public visibility such as the MRT, buses and taxis. While it is still early days, we understand it is closing its gap with JobsDB to 2,000 jobs posted per month, down from a 3,000 to 4,000-job gap previously.
Migration from print to online job advertising will boost online postings as: (i) broadband penetration increases; and (ii) more adoption of portable gadgets such as iPhone and iPad. The Malaysian government expects the broadband penetration rate to reach 75% by end-2015 (from 31% in 2009). According to a World Bank study, a 10% increase in household broadband penetration can raise GDP growth by more than 1%. Maintain buy on JobStreet with a RM3.30 target price based on 1 times PER. It is currently trading at 25% discount to its regional peers. ' HwangDBS Vickers Research, July 5
This article appeared in The Edge Financial Daily, July 6, 2010.
Company Name: JOBSTREET CORPORATION BHD
Research House: HWANGDBS
JobStreet Corporation Bhd
(June 30, RM2.03)
Maintain buy at RM2.03 with a target price of RM3.30: Resumption of hiring as regional economies recover will continue to drive earnings momentum in 2Q2010. Malaysia, which commands more than 60% of group revenue, posted an average of 16,000 to 17,000 jobs per month on JobStreet's portal for April to June against 13,000 to 14,000 per month (+23% quarter-on-quarter) in January-March. Singapore also shows strong job posting sales of about 18,000 jobs currently, close to its all-time high, and higher than 1Q2010's 14,000 per month. 2Q2010 will also benefit from maiden associate earnings from 104 Corp, in which the group has a 20% interest.
Potential sales and market share gain with more marketing spends. JobStreet embarked on its aggressive marketing plan in April this year to build brand awareness mainly in Singapore. It plans to spend about 5% of sales in marketing, still a far cry from its major shareholder SEEK Ltd's 25%-30% of sales. JobStreet advertises in places with high public visibility such as the MRT, buses and taxis. While it is still early days, we understand it is closing its gap with JobsDB to 2,000 jobs posted per month, down from a 3,000 to 4,000-job gap previously.
Migration from print to online job advertising will boost online postings as: (i) broadband penetration increases; and (ii) more adoption of portable gadgets such as iPhone and iPad. The Malaysian government expects the broadband penetration rate to reach 75% by end-2015 (from 31% in 2009). According to a World Bank study, a 10% increase in household broadband penetration can raise GDP growth by more than 1%. Maintain buy on JobStreet with a RM3.30 target price based on 1 times PER. It is currently trading at 25% discount to its regional peers. ' HwangDBS Vickers Research, July 5
This article appeared in The Edge Financial Daily, July 6, 2010.
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