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Friday, August 10, 2012

JOBST- improved bottom-line due to investment return!

Results Update

For QE30/6/2012, JOBST's net profit increased by 66% q-o-q or 29% y-o-y to RM17 million while revenue increased by 19% q-o-q or 24% y-o-y to RM45 million. The company attributed its improved performance to higher revenue came from higher sales from Jobstreet Essential & dividends from HK investments. This- and higher profit from associates & a JV entity- contributed to higher profit.

Fr the current quarter, we saw:
1. The Philippines operation showed the more improvement y-o-y with a 50%-increase in revenue to RM14.4 million & operating results  also increased by 50% to RM6.50 million.
2. Revenue in the Malaysia & Singapore operation improved slightly. The Malaysia operation received a dividend income  of RM4.14 million while the Singapore operation, enjoyed a gain on sale of financial assets of RM1.46 million and a dividend income of RM1.72 million from a related company.
The high amount of financial gain or external dividend totaling RM5.6 million is a mixed blessing. This came from its holding of short-term investment of RM37 million as well as available-for-sale investment of RM33 million. In addition, it must be noted that it has cash in hand of RM77 million. The group bank borrowings is negligible at RM300k. This means that JOBST has a cash backing of 46 sen per share!


Table: JOBST's last 8 quarterly results


Chart 1: JOBST's last 25 quarterly results

Valuation

JOBST (at RM2.26 now) is trading at a PE of 15.5 times (based on the last 4 quarters' EPS of 14.57 sen). If the cash backing is deducted from the share price, then JOBST's PE would be 12.3 times. As such, JOIBST is deemed attractive.

Technical Outlook

JOBST has broken below its long-term uptrend line in late 2011. In April this year, it attempted to climb back above that uptrend line but it ws unsuccessful. The stock's immediate support is at RM2.05 while its immediate resistance is at RM2.40.


Chart 2: JOBST's weekly chart as at August 9, 2012 (Source: Tradesignum)

Conclusion

Based on good financial performance & attractive valuation, JOBST is a good stock for long-term investment. However, the technical outlook is not exciting as the stock is likely to trade sideway for now (between RM2.05 & RM2.40).

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