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.
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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...
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