Recent Financial Results
For QE30/9/2011, Jobst's net profit declined by 13% q-o-q to RM11.6 million while turnover was maintained at RM36 million. When compared to the same quarter last year, net profit was up 20% on the back of a 18%-increase in turnover. The decline in net profit on a q-o-q basis was attributed to a drop in the fair value of the group's other investment of RM1.2 million, which was recognised in the P&L account. If this loss is excluded, the drop in the group's pre-tax profit would only be about RM600k (instead of RM1.8 million).
Despite the challenging operating environment, Jobst noted that the demand for recruitment advertising services is solid. As such, we can expect Jobst's financial performance to be satisfactory in the next financial year.
Table: Jobst's last 8 quarterly results
Chart 1: Jobst's last 22 quarterly results
Valuation
Jobst (closed at RM2.18 today) is now trading at a PE of 14.5 times (based on last 4 quarters' EPS of 15 sen). Jobst has a PEG ratio of 0.5 time, based on a CAGR of more than 30% for the past 3 years. At this PEG ratio, Jobst is deemed attractive.
Technical Outlook
The technical outlook for Jobst is bearish. Despite this outlook, I believe the stock could be well-supported at RM2.00-2.20. The negative outlook could simply be translated to a side-way market for the stock.
Chart 2: Jobst's monthly chart as at Jan 3, 2012 (Source: Tradesignum)
Conclusion
Based on attractive valuation, Jobst remained a good stock for long-term investment. however, you can expect the stock to trade side-way froa while with the support at RM2.00-2.20.
4 comments:
Hi Alex,
How you see Kimlun now due to the Iskandar case ?
TQ
As per your analysis, price shouldn't be near 52W low, any idea?
Hi cheer
I am not sure what's the impact on Kimlun as a result of the Iskandar case, where its director obtained information on tender price from an insider. Would the company be banned from tendering for contracts from the public sector or maybe only in Iskandar? Kimlun is expected to tender for jobs in the MRT project as it can undertakes tunnel lining works.
Technically, Kimlun can expect good support at RM1.00-1.20.
Hi Kong Hui CHONG
After weighing the fundamental outlook & the technical picture, I chose to put aside the technical negative point of the stock trading at its 52-week low.
My guess is that the stock is correcting in line with the market, albeit after a lag of 1-2 month. It has also reported a lower net profit, which raised question about the sustainability of its profit growth.
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