The following excerpts explain why Zacks senior Chinese market analyst Paul Cheung, CFA remains bullish and issues a Buy rating to the stock of 51job, Inc. (JOBS):
'51job announced its financial results for the third quarter with declining net income and higher sales and marketing expenses. Its EPS were in line with the market consensus, while revenue exceeded market consensus. 51job continues to have the highest brand recognition in both the online and offline recruiting market in China.
'Moreover, China's prosperous economy will continue to boost the recruiting market. Overall, we believe 51job is well positioned to leverage this market opportunity in China. Therefore, we are maintaining our Buy rating for the stock.
'Overall, we believe 51job can leverage the market opportunity existing in the human resource sector in China. Based on our estimate for fiscal year 2007 earnings per ADS, the stock is trading at 35.1x, which is lower than the industry mean.
'Based on our estimate for fiscal year 2008 earnings per ADS, the stock is trading at 27.2x, which is much lower than the industry mean. Using a P/E multiple of 30.0x our fiscal year 2008 earnings per ADS estimate of $0.71 yields a six-month target price of $21.25 which, in our view, should reflect the company's great growth prospects.'
Read the full analyst report on JOBS.
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