KUALA LUMPUR: JobStreet Corp Bhd’s share price shot up as much as 15 sen or 38.5% yesterday to 54 sen from 39 sen last Friday, leaving many to wonder why it is drawing investors — some 71.83 million of its shares changed hands at yesterday’s closing — even when it has no core business to speak of.
As at end-September, the company’s net assets were at RM254.6 million or 36 sen per share compared to its current market capitalisation of RM374.5 million, as it closed at 53.5 sen per share yesterday, up 37.2%. It also has a clean balance sheet with zero borrowings.
After completing the disposal of its online job portal to Seek Asia Investments Pte Ltd for RM1.89 billion on Nov 20, JobStreet had distributed almost all the proceeds of the disposal as a special cash dividend to shareholders at RM2.65 per share.
This leaves it with a net cash position of RM46.3 million, which translates into a net cash per share of 6.6 sen, albeit without a core business.
Hence, it will be classified as an “affected listed issuer” as set out under Practice Note 17 (PN17) of Bursa Malaysia’s listing requirements, and will need to formulate a regularisation plan.
This means that options are open for JobStreet to make value-accretive acquisitions, as long as it is outside the job portal industry, from which it is prohibited for the next two years.
The 6.6 sen net cash per share does not seem to be much but the company’s balance sheet holds available-for-sale investments that amount to some RM50.13 million, with investments in associates of RM90.53 million.
According to JobStreet’s 2013 annual report, equity-accounted investments in associates include Innity Corp Bhd, Taiwan Stock Exchange-listed 104 Corp, and a jointly-controlled entity, JobStreet Recruitment (Thailand) Co Ltd.
In 2013, its profit share from associates doubled to RM6.2 million from RM3.1 million the year before, mainly due to the 26.7% rise in net profit to RM24.6 million reported by 104 Corp.
A check with Bloomberg showed that 104 Corp posted a record net profit of NT$102.6 million (RM11.3 million) in the third quarter ended Sept 30, 2014 — its all-time high — up 45.5% from NT$70.5 million a year ago.
Notably, Taiwan-listed 104 Corp’s stock has also risen about 50% in the past five months, from NT$110.60 on July 16 to NT$166.50 yesterday.
JobStreet also appeared as one of The Edge Research’s Stocks with Momentum last week.
“The company’s net assets stand at 36 sen per share and are understated as it has an unrealised gain of RM29.75 million on marketable securities (mainly shares of 104 Corp Taiwan) at end-September 2014 and an eight-storey office building in Jalan Sultan Ismail, Kuala Lumpur acquired in 2005 and valued at only RM13 million,” noted The Edge Research.
Additionally, JobStreet’s strong management, led by chief executive officer Mark Chang, founder of both JobStreet.com and MOL AccessPortal Sdn Bhd, stands it in good stead.
This article first appeared in The Edge Financial Daily, on December 30, 2014.