The co-working operator was listed less than two months ago at 94 cents, and its share price promptly dropped to as low as 50 cents before ending July 15 at 70.5 cents.
With 50 centres across 10 cities, the flexible workspace platform delivered a strong operating performance in FY2025 ended Dec 31, with revenue increasing 12.5% y-o-y. Revenue growth was supported by a y-o-y 6.6 percentage point increase in occupancy, a 12.9% y-o-y rise in workstation capacity and 13.1% growth in memberships, notes Liu.
The group swung into a net profit of US$2.7 ($3.5) million for FY2025, while results from operating activities increased more than fourfold as improving utilisation drove meaningful operating leverage. The way she sees it, the business demonstrated its scalability with cash ebitda “surging” 118.5% y-o-y to US$13.5m.
Liu believes in JustCo’s growth prospects due to expanding pipeline visibility and improving operational efficiency. She forecasts workstation capacity to grow at CAGR of around 19.5% from FY2025 to FY2028, which would support revenue CAGR of roughly 22%.
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Furthermore, with occupancy estimated to increase by three percentage points by FY2028, Maybank expects stronger operating leverage to support cash ebitda margin expansion from 9.4% in FY2025 to 14.1% in FY2028. As such, cash ebitda is expected to grow at a CAGR of 43% from FY2025 to FY2028.
Using a target enterprise value (EV) to cash ebitda multiple of 8.5 times for FY2027, she values the business at $1.02. This is a “modest” premium to the lower quartile of peers, reflecting JustCo’s “strong” FY2025 to FY2028 expected revenue and cash ebitda CAGR of 22% and 43%, balanced against execution risks and relatively limited operating scale.
Liu believes that JustCo’s growth potential is undervalued at current 3.3 times EV/Cash ebitda with $151 million of net cash.
The counter closed at 70.5 cents on July 15, up five cents or 7.6% from the previos trading day.
