Being independent in thinking becomes the most necessary element in investing. I admit that I can't even ignore others' opinion when I say I want to invest in Jobstreet. It might be due to the characteristics of the company that is sensitive to worldwide economy---highly depends on the economy up-and-down. World economy deeply influences Jobstreet performance.
Ok, I am not going to invest for now and observe it for some time to make decision. Good choice?
This is what I have done. The main point is that ROE is keep on decreasing every year. ROE means return on shareholders' equity---How much of the return for each dollar shareholder invests in its shares. Profit increasing and the peak time shall be from 2004 until 2007. Never forget that the company intends to pay dividends out of 50% of net profit start from 2011.
Now I am not going to talk about the figure information (your can look at it by yourselves). Let's have SWOT analysis apply in this company.
Strength : No doubt Jobstreet is the leader of employment website in Malaysia. Malaysia continues to be the major revenue contributor to the company. Also it is expanding the business across the region in India,Japan, Hong Kong, Philippine, Singapore, Indonesia, Taiwan and Thailand. Diversification has indicated that the Management has the ambitious to become the region champion in this business.
Beside that, the brand of "Jobstreet" has been the famous name among the jobseekers who always seek for the jobs through Internet.
Branding decides a company profit sometimes, the best instance : Coca-cola has the best ever brand among its competitors, even an american is given coke and pepsi, he or she would choose coke although those drinks have not much different from taste.
Weakness: Obviously Jobstreet is a employment website that depends heavily on technology which comes out some uncertainties in its future. Perhaps by strong branding, Jobstreet continues to be the biggest player but never forget that the company invests heavily on its technology year by year in order to maintain or improve its service. Providing services by technology is risky due to rapidly changes in technology which could impact the company investment. Since it is still in growing stage, somehow cash flow needs to be retained for technology.
Those who expect high dividend payment from Jobstreet should reconsider and think twice before you really put money into this company. Since they less borrow from the banks, the best way to raise fund is through share market.
Opportunities: Southeast Asia is one of the most fastest growing economy region among the others. Jobstreet expands its business into Southeast Asia could be the insight of the CEO. Indonesia has over 200 million population and it is still increasing, online users too. Since the young people are getting into job market, more and more demand on jobs could spur the presence of jobsteet. Also, more and more western companies are shifting their focus to Asia especially Southeast Asia. Investment in those company is keep on increasing and more branches are established, jobs are created.
Threats: No sector has little competition. In employment website sector, the services providers are increasing. This has created highly competitive market. Threaten by the increasing number of competitors, Jobstreet could be affected by "war of price" which services providers compete each other by price cutting. Profit would be affected most.
Also, the company is very sensitive to world economy as its profits showed that it is highly depending on world economy up-and-down. Please beware that this company has its own cycle which follows the trend of world economy.
In fact, no company is perfect. Indeed Jobstreet is good company but still needs times to prove its own strength whether it delivers value to shareholders and clients or not.
