Morgan Stanley launches investment report today to maintain worry stock reduction rating

Morgan Stanley today issued an investment report to maintain the worry stock (nasdaq:jobs) "reduction" rating, bringing its target share price from $62.90 to $70.20.

The following is a summary of the contents of the report:

Worry 2013 was strong in the quarter and the first quarter of fiscal year 2014 was expected to be relatively upbeat. But the near-term profit margins are still fraught with pressure, influenced by investment. We still have confidence in worry's ability to execute and market position, but continue to "reduce" the rating of its stock, mainly because the current valuation is higher.

Performance exceeded expectations: The fourth quarter, worry revenue growth of 19%, exceeding the company's guidance expectations, 4% higher than our expectations. Diluted earnings per share of 0.85 U.S. dollars, an increase of 25%, compared with the company's guidance forecast of 9% higher than our expected 12%.

Positive factors: 1 Network recruitment business revenue growth of 22% Year-on-year, while the second quarter and third quarter revenue year-on-year rise between 14% to 15%, mainly thanks to the increase in the number of users. 2 Other human resources services revenue growth of 20% year-on-year, mainly thanks to the strong demand for campus recruitment, as well as the popularization of outsourced services. 3 The first quarter of the fiscal year 2014 expected strong revenue growth of 14% to 18% Year-on-year. We expect the revenue to rise by more than 20% per cent year-on-year if the print advertising business is excluded.

Negative factors: 1 Operating profit margin fell 2%,. are expected to continue to fall by 5% to 6% in the first quarter of fiscal year 2014, which is largely dragged down by the huge cost of expanding sales teams.

Valuation: We continue to maintain the worry stock "reduction" rating, the target share price from 62.90 U.S. dollars to 70.20 U.S. dollars.