Thursday, May 23, 2013

Jobstreet continues to amaze (Updated)

I am not saying this because I own this stock. In fact I am upset cause I did not buy more. Sometimes when there are doubters, I tend to pull back (not blaming anyone but myself). The business of Jobstreet continues to do well, now perhaps not in one country but 3 countries - Malaysia, Singapore and Philippines. It is not a "jaguh kampung" anymore.

See below:

Each of the 3 countries I mentioned exceeded RM10 million in revenue for the first quarter 2013. The business is easy but hard to quantify. As I have said before, and those whom have read my blog in this company would probably be tired (sorry) of me continuing to comment on Jobstreet (nope, I am not paid, in fact I am only a small shareholder), but it is not easy to comprehend. Me myself had doubts before. Just see the previous blog and its comment.

We have doubts because of the competition at hand. There is again Star (as I see it going nowhere yet), LinkedIN and perhaps many more. I have invested into Monster, it is a different "Monster", I can tell you that - don't know why. LinkedIN? I doubt so as LinkedIN itself would not be able to get so much market share. Perhaps the soft job market still in US and Europe.

Now, based on the above segmental, look at below for the previous corresponding quarter comparison:

Almost every ringgit earned is a ringgit gained. As long as it grows its revenue, it will perform amazingly.

I do not know how much the company spends on marketing costs, but the main strength now is the database which in the balance sheet you do not see. What do you see in the balance sheet? Besides to tell us that it has a strong balance sheet, nothing much...

Currently, as the company continues to be on the uptrend, its Price to Book Value will get widened. The cash that it holds will cover its expenses for slightly more than a year, I think. And that's it, nothing much to analyse.

Until now, Jobstreet has its policy of distributing 50% of its profits as dividends. It has just upped that to 75%. It has made some mistakes of using the additional cash that it had by investing into some companies. While some of the made sense, i.e. investing into the dotcom job search companies like in Taiwan, there are others which are not bringing much returns. The monies that Jobstreet invested into are the ones boxed in red above. I am just glad that they are preparing to share more of its profits in the form of dividends.

The beauty is in the cashflow, hence dividends (be prepared for more) as well as the P&L. I should have bought more...


LHC said...

Do highlight more of such are doing a great service to your readers. Appreciate it.

Sunny said...

What do you think about STAR?
You think it is a WONDERFUL business?
The price is not WONDERFUL but is still attractive, I think.
If you want to set aside 20% of your investment in a stock at low risk hoping for a medium return, say 15% per annum, is STAR deems fit the bill?

felicity said...

don't think so, for Star

panaceaasia said...

Thank you for recommending Freight Managment & Jobstreet. Both have wonderful businesses.

REMM2012 said...

JS is in my top 50 list but still not convinced to part my money for it. Why? 2 things among others are (1) if global economy takes a downturn (slowdown in China now and the prolonged crisis in the USA and Europe), the job volume and thus business traffic at JS will be reduced (2) other similar companies (e.g. Monster, Linkedin) are competing for part of the market slice. Like JS's CEO Micheal Chang said, they need to continuously reinvent themselves in this job business segment to maintain the lead/share. JS market cap has reached the RM 1 billion level recently. An impressive achievement for a young company of only 10 years old and starting market cap of about RM100 million (my estimate).

Overall, for the short term, yes, some potential in making some good money. For the long term (which I aspire for), I am 50-50 as the business need may be diminishing with new recruitment process. But by when?

P/S A plus for JS is their dividend policy - at least 50% (or 45%, I can't remember now) of earnings will be paid out as dividends. For the past few years, their DY has been at around 2% p.a. (below my DY target unfortunately).

felicity said...

There is a flaw in LinkedIN type of business. I am an employee, I do not want my CV to be opened up by people whom I know to be able to see it. This is unlike Jobstreet where the CV is to the companies or headhunters I send to. Overtime, although LinkedIN will still grow fast because of its aggressiveness and also based in US where people are willing to pay for hundreds of multiple PE for companies like this, it will manage to eat a small market share of Jobstreet like companies. However, one must remember Jobstreet and the rest will eat the market share of Star, Sin Chew and the rest. It is not even-ing out but more so of both Jobstreet and LinkedIN growing while the traditional papers struggling or stagnating.

Black Ink said...

When Michael Page came to Malaysia in Dec 2010, and set up an office in Kuala Lumpur, their full-year target was RM4 million in revenue (which they reached). That was one office with 16 full-time staff, which they hired throughout the year. This included 4 managers from Europe that trained and oversaw operations.

felicity said...

Great stuff

Aaron Hee said...
This comment has been removed by the author.
Aaron Hee said...

Hei Felicity,

Stumbled across your blog recently. You have interesting reads and thoughts on your blog.Keep it up!

I used to own Jobstreet. Bought it in the later half of the recent recession. Exited after doubling my position. Retrospectively, could have gained more at today's price. Got to agree with you - JS isn't just a 'jaguh kampung'. Awesome metrics they have.

As for Linkedin, what you see as a flaw is actually the main attraction of Linkedin. A Linkedin account makes one's professional accomplishment to be seen publicly and discovered. Don't have to toot our own horn all the time. After attending many events, I observed that the connection post-event will be extended to Linkedin and no longer just through emails. Often people will ask 'What's your linkedin?'. It isn't just a recruiting tool- Linkedin is a social network with sttrong network effects for professionals allowing us to establish connections and discover for people with the right experience and expertise to consult.

Linkedin and JS, from the recruitment perspective, are in different categories as of today. JS can be seen as a recruitment tool for jobs in mid-management and lower level. As for Linkedin, it is used for hiring candidates for mid-level positions and above. Having said that, both companies do have some overlapping.

Linkedin is optimising now for college students, for its product to be more friendly for this new generation. What this means is that it's gradually entering JS's market. In Malaysia alone, they have 1million members.

Both companies have database but what matters is the lock-in. What Linkedin has that JS doesn't is its network effects of its database- this itself is an extremely strong economic moat. Despite this, at least in the next 5 years, the markets JS and Linkedin serve will remain distinct, but I believe the lines will blur pass the 5 years.

Job market is a lucrative market if one can establish their foothold.