Technical Outlook

Jobst broke about its strong horizontal resistance at RM1.80 earlier this month (see Chart 1). The share price, which was slowly inching higher, has now broken into a galloping run (see Chart 2). However, it should be noted that this breakout occurred after a sharp run-up at the end of February, where the stock soared from RM1.45 to RM1.80.


Chart 1: Jobst's weekly chart as at Mar 15, 2010 (Source: Tradesignum)


Chart 2: Jobst's 60-min chart as at Mar 17, 2010_9.30am (Source: Quickcharts)

Recent Corporate Development

Two recent developments could be the catalyst for the current upleg. Firstly, SEEK Ltd, the market leader amongst employment websites in Australia & New Zealand lifted its shareholding in Jobst to 21.35%. Secondly, Jobst (via its wholly-owned Singapore subsidiary, Jobstreet Singapore) bought out its JV partner, TV18's 50%-stake in the India JV, Jobstreet India.

Recent Financial Results

From the table below, we can see that Jobst's net profit fro QE31/12/2009 soared to RM6.3 million from RM1.7 million last year. The sharply lower net profit recorded in QE31/12/2008 was due to provision for diminution of value of investment of RM5.4 million. However, Jobst's net profit dropped 17.7% q-o-q on the back of a 5.6%-drop in turnover.


Table: Jobst's last 8 quarterly results


Chart 3: Jobst's last 15 quarterly results

Valuation

Jobst (at RM2.00 as at 10.45 am) is trading at a PER of 23 times (based on FY2009 EPS of 8.6 sen). At this PER multiple, Jobst is deemed fully valued.

Conclusion

Based on recent financial performance & valuation, Jobst's upside is deemed limited. However, the stock could be a trading BUY based on technical consideration.