Two days ago, 58 cities announced the acquisition of Jiji.com, and a pair of judges in court finally came together after years of confrontation. The acquisition of Jiji.com was valued at US$ 3 billion, and 58 additional 17 million ADS plus US$ 400 million (cash from Tencent's previous rights issue) acquired 43.2% shares in Jiji.com..
Although the American media released this news, the intraday price rose by 33.5%, but the market still has different opinions, mainly entangled in: 1, this marriage is not "free love", but "parents forced marriage", like Youku Tudou and Didi Kuai; 2. Yang Haoyong at the Expo may not be able to play a leading role in the subsequent integration process, but if he and his team fade out, the difficulty of team integration may increase; 3. There are many overlaps in the business of both parties, so it is difficult to generate 1+ 1 > in a short time. The effect of 2.
We are cautiously optimistic about this merger, and the main reason for optimism is similar to everyone else: without a competitor in the market, the two companies don't have to fall into endless tug-of-war, they can form a joint force in the brand and save a lot of marketing expenses.
The following is the cautious side mainly from the financial and investment aspects:
The first is to calculate the income of 2014 in Jiji.com. Jiji.com did not publicly disclose the income and profit of 20 14 years, but because of Yang Haoyong's public speech, the online recruitment income last year was 768 million yuan, or1250,000 US dollars. In addition, since the market value of 58 in 52 yuan (at the exchange price) is 4.58 billion US dollars, the market value of 58 is about 3:2. Based on the revenue of $2065438+265 million in 2004 in 58 cities, the market income is about $65438+77 million (it may be slightly higher than the actual figure, after all, the secondary market is highly valued).
The second is to calculate 100% of the total share capital of the merged market. This is not easy, because the time and constraints of the second phase of M&A are unknown now, but the relatively simple algorithm is: according to the purchase price of 52 yuan and the total valuation of 3 billion US dollars, under the premise of 100% acquisition, the total share capital of 58 is145.65 million ADS (considering Tencent's additional equity, the completion amount of this transaction is1). Based on Friday's closing price of 70.5 yuan, the current market value is $6543.8+02 million.
The third is to calculate the income in the next few years after the merger. According to the unanimous expectation of Bloomberg, the revenues of 15, 16 and 17 are $420 million and $6190,000, respectively. We calculated that the revenue of 17 is $900 million (therefore, the growth rate in three years is 58% and 47%. Let's measure the market again. Yang Haoyong mentioned that the revenue targets of the recruitment business of the market in 20 15 and 20 16 years are 1500 million and 3 billion yuan respectively. According to such an optimistic forecast (of course, the goal may not be achieved), we predict that the income of 15- 17 will be 336 million, 5.7 10/000 million and 884 million US dollars respectively (the three-year growth rate is 90%, 70% and 55% respectively), so that the fair will be successful.
At that time, we had to consider sports. O2O is a heavy business. Craigslist in the United States earned more than $654.38 billion (another $300 million) because the website was operated by only a few dozen people, but it had 80% net profit. And 58, the market is a push mode, which is difficult to compare the profitability of traditional online games and online advertising. Therefore, personally, the net interest rate of 15%-20% should be not low, so the net profit of 20 17 is about 240-360 million US dollars, equivalent to 29-38 times. If the CAGR of 20 18-2020 is 30%, we will find that this PEG is about 1 times, which is equivalent to or even slightly higher than that of most China stocks at present. The problem is that this P/E ratio has been overdrawn for two to three years.
Therefore, if 58 cities want to have more market value space, they need to prove that 1 and O2O are a huge market, which can maintain rapid development, instead of the growth level of quasi-traditional enterprises falling to about 30% after three years; 2, from heavy to light, improve the efficiency of personnel reuse and the ability of software to replace labor, which makes people believe that the net profit level of 15%-20% is achievable; 3. The smooth integration and retention of talents can make the recruitment of job fairs grow rapidly, instead of brain drain, and the growth rate slows down rapidly; 4. Facing the competition of BAT's comprehensive platform, the horizontal expansion of Meituan/Dianping, and the competition of vertical portals such as car home, Easy Car and SouFun, we have maintained a good grasp.