KUALA LUMPUR (May 18): JobStreet Corp Bhd is set to widen its portfolio in Southeast Asia with Vietnam as its latest addition.
In a filing with Bursa Malaysia on Thursday, the online recruitment outfit said it has entered into a memorandum of understanding (MoU) with a Vietnamese entrepreneur, Nguyen Hoang Bao, to set up an 80:20 joint-venture company in Singapore, which in turn will hold a 100% stake in the proposed venture in Vietnam.
The announcement also said the initial capital contribution from JobStreet for the Vietnam venture will amount to US$800,000 (RM2.48 million), to be funded by internal sources, while Nguyen will be contributing US$200,000.
"We feel comfortable to enter Vietnam now. We have a good partner and the market prospects are good. The economic slowdown makes it relatively cheaper to advertise the JobStreet brand there," said JobStreet Corp CFO Greg Poarch after the company AGM on Thursday.
Poarch believes the venture into Vietnam is timely despite the global economic slowdown as the cost of entry will be lower than during an economic boom.
"During the first two to three years, we will be focusing on getting as many jobseekers as possible on our website to build brand awareness as well as to build a good local team instead of focusing on revenue," Poarch added.
With the growing trend of Malaysian and Singaporean companies venturing into Vietnam and setting up manufacturing operations there, Poarch said it is a natural move for JobStreet to set up its online recruitment operations in the country.
In 1Q, JobStreet's net profit dropped slightly to RM10.36 million or 3.24 sen a share from RM11.29 million a year earlier. Revenue, however, increased to RM37.86 million from RM33.63 million in the previous year.
The significant increase in operating expenses in 1Q to RM24.44 million from RM19.39 million previously had weighed down on earnings.
"It is difficult for us to tell how much the economic slowdown impacted our results because the competitive environment is quite intense as well, but we do sense some slowdown. The number of jobs on our website, while it remains high, is not growing as much as last year," Poarch admitted.
JobsDB.com is currently JobStreet's main competitor. Poarch told the media he does not think JobStreet has lost any market share to JobsDB.com so far and that it has done a good job defending its market share.
Moving forward, with the eurozone debt crisis and the sentiment on the upcoming general election, Poarch said the company is conservative about growth prospects for the remaining quarters of the year.