Long/short equity, growth, contrarian

Zhaopin: You Are Fired; Initiating With Sell And $12 Target, Based On 16x FY15 PER

I am initiating on Zhaopin (NYSE:ZPIN) with a bearish view and a target price of $12, based on comparable multiples, implying 17% downside from Friday's close. I value ZPIN at 16x FY15 earnings, 2 multiples below 51Jobs (NASDAQ:JOBS) as ZPIN is still a subscale player compared with JOBS (detailed below). However, I am valuing ZPIN at a premium compared with Monsters (NYSE:MWW) due to my positive view on the long-term growth of China's online recruitment market.

(click to enlarge)

For the near-term, I see ZPIN faces a combination of macro and micro risk, but I believe that the micro risk outweighs the macro risk.

On the macro level, China's soft economy will likely to...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details