Sorry - haven't checked this thread for a couple of weeks.
Some maths
They made $64m operating cashflow, and 55.3m NPAT (one main diff from Berhad $7.5m writedown) on $452m total assets or $288m equity. ROA of 15%, ROE of 19.2% at the bottom of the cycle.
I think the market was pricing in a far worse result with some heavier writedowns than occured. The market definitely didn't expect their new ventures to improve their financials (even jobstreet was flat). I wasn't so confident either I have to admit, especially re education.
Typical top of cycle return on (balance sheet) total assets has been about 37% after some major adjustments for the cost of options etc to the shareholders. If we reduce this return to 25% to allow for 25% reduction (new lines of business and slow recovery, and ignore the $7.5m non-recurring write-down of job-street) - we are looking at NPAT of around $100m (say) two years into the recovery, if the balance sheet is similar. That nearly halves the current PE ratio.
Give it (worst case) to 2010/11 for minimum earnings of about 32 cps, then another two years for minimum earnings of about 60 cps (with some investments further paying off, reduced losses from China and compounding on retained earnings) at (say at minimum during recovery of business cycle) 26 times earnings is over $14.
I doubt the (look through cycle) growth story will change - there are no signs at this stage, and so far all investments have been fairly sound.
DYOR
SEK Price at posting:
$5.60 Sentiment: LT Buy Disclosure: Held
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