JOBST- bottom-line dipped

Results Update

For QE31/12/2012, Jobst's revenue dropped q-o-q as a result of lower sales from JobStreet Essential due to seasonality factors. Pre-tax profit contracted by 15.4% q-o-q mainly due to the impact of lower sales from JobStreet Essential, higher marketing expenses, lower share of profits from associated companies and a lower increase in the fair value of the Group’s investments. The comparison of profitability between the two successive quarters will have to take into account significant one-off items such as the reversal of impairment loss on investment in an associate of RM4.1 million in QE31/12/2012 and the gain on dilution of interest in an associate of RM969k in QE30/9/2012.


Table: JOBST's last 8 quarterly results


Chart 1: JOBST's last 27 quarterly results

Valuation

JOBST (closed at RM2.58 yesterday) is now trading at a PE of 14 times (based on last 4 quarters' EPS of 18.25 sen). For a stock that has been growing at an CAGR of 25%, JOBST has a PEG ratio of 0.5 time, which is very attractive.

Can JOBST maintain its strong growth rate? From the article entitled "Jobstreet well positioned for regional growth" in the Edge this week, we learned that JOBST is now present in six of the largest markets in S.E.A. namely Malaysia, Singapore, the Philippines, Indonesia, Thailand & Vietnam. Besides Malaysia, it is the market leader in Singapore, Indonesia & the Philippines. With a population of 600 million and the rapid economic growth, ASEAN will be the focus of JOBST's regional expansion plan. As such, I feel strongly that JOBST will be able to maintain its strong growth.

Technical Outlook

JOBST broke above its horizontal resistance at RM2.40. It is now pressing against its next resistance at RM2.60.



Chart 2: JOBST's weekly chart as at Mar 4, 2013 (Source: Quickcharts)

Conclusion

Based on good financial performance (albeit a small decline in the past two quarters), attractive valuation & positive technical outlook, JOBST remains a good stock for long-term investment.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, CCM.