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JustCo
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7ocean
Master |
22-Jun-2026 16:55
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WOW....Approximately 50% discount....
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Ramster
Master |
22-Jun-2026 13:47
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The meltdown continue, DYODD for this new IPO has dropped from an IPO price abt 90c so sad | ||
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Joelton
Supreme |
13-Jun-2026 14:21
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Justifying JustCo with an intrinsic value of 69 cents One of the harder challenges of investing is discerning the valuation of a recently IPOed or listed company. This is primarily due to the lack of financial information available for assessment (unless the company discloses it over at least five annual financial periods). The good thing about this is that there&rsquo s a higher probability of it being misvalued &mdash either undervalued or overvalued. This is typically the case for smaller companies or those that trade in less-liquid markets with limited investor interaction and analyst coverage. Assuming markets are rational when valuing, larger companies with greater investor interest are usually covered by experts who have the right tools to value them and these companies would trade closer to their fair or intrinsic value, with a lower probability of investors profiting from mis-valuation. But no one has perfect predictive tools &mdash hence, targeting smaller companies or companies that have recently IPO-ed would allow the investor to compute the intrinsic value and make an informed investment decision before the market realises it through the company&rsquo s future financial performance. That said, the company in focus for this article is the recently listed JustCo Holdings (SGX:JCO) , which listed on May 22. JustCo is a small-cap Singaporean company that provides workspace facilities for private offices, co-working, meeting spaces and virtual offices across 12 Asia Pacific cities through three brands: &ldquo The Collective&rdquo (the company&rsquo s luxury offering), &ldquo JustCo&rdquo (the company&rsquo s premium brand) and &ldquo The boring office&rdquo (the company&rsquo s essentials brand). The offer/listing price was 94 cents and as of the close on June 5, the company&rsquo s share price is down almost 30% to $0.665. Is the company overvalued and adjusting downwards to its potentially lower intrinsic value? Or is it oversold after the initial hype and undervalued? The best way is to analyse the company&rsquo s disclosed financials to get an idea of a fair valuation. But before that, it is important to understand the company&rsquo s business model. JustCo operates a dual business model. What&rsquo s JustCo&rsquo s business model? The first is a traditional lease model, in which the company secures long-term leases for workspaces and operates them directly, taking a more active approach to occupancy management. From an investor&rsquo s perspective, this is great if occupancy rates remain above a certain level. As of JustCo&rsquo s latest financial report, the occupancy rate is at a healthy 84%. Further, given that this model enables the company to actively manage its costs, it should be able to manage its profit margins more effectively. However, the trade-off is higher upfront capital costs for these spaces. The second is a management contract model, where the company operates workspaces under arrangements with landlords. This is an asset-light model with minimal upfront capital investment. The trade-off is that the company must either retain a portion of its revenue or operating profits as fees, pay a minimum base rent, have recurring management fees, or pay a fixed rent. All options, to a certain extent, eat into the company&rsquo s profits and investors should note that if JustCo was truly doing well, profit sharing should be avoided and fixed rent is the way to go, because costs then wouldn&rsquo t scale as much with the company&rsquo s profits. Aside from key names such as General Electric and Tencent, who are clients/members of the company, the renewal success rate has grown to around 72% as of the most recent reported financial year. Investors should note that, on average, the company takes five months (post-launch) to break even on cash ebitda and 16&ndash 24 months (post-launch) to achieve overall payback (the time for an investment to recover its initial cost) from the launch of a JustCo Centre. These figures are important to investors assessing the company, given that it takes between three and six months from signing a lease contract, rent-free for its fit-out period, to make it ready. That is, on average, close to two years post-lease signing for the company to successfully manage its centre before seeing free cash flow. Revenue generation The company generates revenue primarily from membership-related fees across a portfolio of flexible workspace products, with memberships typically contracted under fixed-term or recurring subscription agreements. Subscription-based revenue models are, in most cases, great, since they provide earnings visibility and usually include compensation for early termination. Also, JustCo offers pay-per-use services such as hot desks and meeting rooms to non-members, along with value-added and ancillary services, including administrative and business support, IT and technology, and fit-out and customisation. To investors, value-added services are a great way to enhance margins and retain clients if done well at a manageable cost. Also, the company is well balanced in terms of customer contract terms, geography, industry and size with members and customers. This is great for balancing and managing risk if a certain archetype fails. However, it comes at the cost of not specialising and potentially missing out on higher margins. Again, there are always two sides to a coin, so the point here is for investors to understand how the business manages its customers and risk. As great as the business is and sounds qualitatively, which is usually the case for most businesses when they present statistics and case studies in their prospectus, the financial figures are facts that truly reflect whether these statistics carry weight. There&rsquo s always a case to be made with any business, for that matter. Still, investors should understand that no matter how great a business model sounds, it is only as good as its ability to perform financially, because at the end of the day, the bottom line, cash flow and dividends truly matter to investors. Hence, for a recently listed company such as JustCo, we can assess and value it using a couple of financial metrics. Firstly, the historical performance. From FY2023 to FY2025, the company&rsquo s revenue has grown by over 12% on average y-o-y. JustCo has also turned over a profit in the latest period after reporting losses in the previous two years. More importantly, both the company&rsquo s operating cash flow and free cash flow have been positive and growing across these three periods. Overall, the company&rsquo s historical performance has been improving. For the investor, this is a good indication that the company may be undervalued. JustCo does not have a dividend policy, nor has it indicated that it will. Still, it is much better to have a record of positive free cash flow that can be paid as dividends, rather than a company struggling to manage its capital expenditures and forced to allocate cash flow to dividend payments. Analysis of price ratios Next, since there is limited price history, it is not feasible to compare the company&rsquo s price growth with its value. Instead, we can use price ratios. Based on the reported adjusted earnings per share of 0.71 cents, JustCo&rsquo s P/E ratio is 93.7 times, which appears excessively high and suggests overvaluation. However, the operating cash flow per share is roughly 26.9 cents, translating to a price-to-cash-flow (P/CF) ratio of just 2.5 times, indicating the company is substantially undervalued. In other words, although the company&rsquo s earnings yield is only 1.1%, its cash flow yield is a whopping 40.4%. But compared with local peers, the mean P/E, EV/Ebitda and EV/Ebit are 11.9 times, 9.5 times and 11.8 times, according to Bloomberg, respectively. JustCo&rsquo s P/E ratio indicates it is very expensive compared to peers however, its EV/Ebitda of just 6.2 times shows it is relatively cheap. The EV/Ebit of JustCo, on the other hand, is 37.1 times, again indicating it is expensive. Given that the company&rsquo s depreciation and amortisation were almost half of its revenue in the most recent financial period, EV/Ebit is a better indication of its valuation, since ebit accounts for the company&rsquo s high depreciation. This proportion of depreciation to revenue, however, has been reducing, reflecting the company&rsquo s transition into an asset-light model. Hence, in future periods, once depreciation as a proportion of revenue is lower, EV/Ebitda would be more appropriate for this type of valuation. Based on this, JustCo is overvalued. Next is the company&rsquo s financial safety. Investors would first notice that the company&rsquo s price-to-book ratio of 6.3 times is extremely high, raising concerns about its balance sheet. The current ratio of 0.86 is below the benchmark of 1 and cash accounts for around 19.1% of JustCo&rsquo s total assets. Additionally, the largest item contributing to total assets is right-of-use assets, which are mainly intangible and depreciated over time. This isn&rsquo t to say that this item is worth less. Still, it is worthless if the company winds up or is liquidated, since right-of-use assets will be derecognised, as they are non-transferable contractual privileges rather than tangible assets that can be sold for cash. Investors should note that, in a worst-case scenario, the balance sheet can provide valuable information about what they would receive at the end of the day. That said, the company has no debt or borrowings, so it is effectively net cash, which drastically reduces the company&rsquo s chances of going bankrupt or going under. Hence, although the company&rsquo s short-term liquidity is not up to par, its overall financial safety is adequate. Profitability-wise, the company&rsquo s operating margins are decent at over 11%. However, given its low profits, its return on equity, return on assets and net profit margin are 4.5%, 0.4% and 1.2%, respectively, which are considerably low. However, it must be noted that the company turned profitable in the most recent financial period, having previously been loss-making, which is a positive. Valuation conclusion Hence, overall, the company appears quite average, but even if it is average, a low share price can make it undervalued. Though it is possible to deep-dive into this company quantitatively, or any company for that matter, to figure out their intrinsic value, it is better done with companies which have all factors strongly indicating that they are undervalued. Regardless, using an optimistic weighted average cost of capital (WACC) of 3.3% in a discounted cash flow (DCF) analysis, the intrinsic value of JustCo is 69 cents hence, it is fairly valued or trading at just the right price. If, however, the company continues its positive performance over the next few financial periods while its share price remains depressed due to a lack of coverage, sentiment, or investor interest, it could be undervalued. |
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shk363
Elite |
10-Jun-2026 23:35
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bottom liao rebound next | ||
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moonsun
Veteran |
10-Jun-2026 10:08
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Exit plan for investors.. dun be the one holding long term.. dyodd | ||
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n3wbie
Elite |
07-Jun-2026 20:30
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The float isnt large but will need some catalysts to move this stock back up closer to IPO price. Overhang is pretty huge | ||
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shk363
Elite |
07-Jun-2026 15:06
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dont worry got bb to stabilize the drop | ||
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investshare
Supreme |
05-Jun-2026 20:04
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As a country, this is misallocation of capital.
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n3wbie
Elite |
05-Jun-2026 15:30
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Sadly also no fixed dividend policy
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JAMMIE
Senior |
05-Jun-2026 13:45
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the problem with this business is that in the current environment this is a boring business with not muvh exciting growth. This will most probably end up becoming another entity whose trading volume would be very thin and mostly controlled by the insiders . Wtih veyr limited instituional participation and even more limited retail participation you wont see much price swings. So even if you enter today and feel you are getting 30% cheaper than IPO, the realty is that ther eis no guarantee the price will reach its IPO price anytime soon or ever. so you basically have your capital locked in. Until next year or in the next time the mngt shares results and starts to give dividends, and then you see some trading volume and the movement in share price. Look at Skylink, even after such a strong business update, after results, the shares have drifted lower and many who invested have their capital locked up. |
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n3wbie
Elite |
05-Jun-2026 12:53
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Apart from a deadcat bounce potentially led by ceo purchase, there needs to be a catalyst to own the stock. It is either market dont know how to price it or just not exciting, whatever it is, there is a clear perception gap to close | ||
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Joelton
Supreme |
05-Jun-2026 12:16
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JustCo founder Kong buys shares after more than 30% drop from IPO price of 94 cents Kong Wan Sing, founder of coworking operator JustCo, has started buying up shares of the newly-listed company from the open market. On June 3, Kong paid 65.5 cents each for 200,000 shares. The following day, he bought another 300,000 shares at 69.4 cents each. This brings his direct stake to 812,500 shares, and together with a deemed interest in another 89,664,630 shares, gives him a total interest in 90,477,130 shares, or 18.5%. Kong bought the shares the day after DBS Bank, which helped manage this IPO, completed its stabilisation after buying 5,319,000 shares by June 2. JustCo' s IPO, priced at 94 cents, closed at 67 cents on June 4. |
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shk363
Elite |
03-Jun-2026 13:18
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still stabilising .. | ||
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Ramster
Master |
03-Jun-2026 12:54
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The worst IPO this year? | ||
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Joelton
Supreme |
03-Jun-2026 12:48
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JustCo&rsquo s stabilisation manager DBS Bank announces cessation of price stabilisation action JustCo&rsquo s (SGX:JCO) stabilisation manager, DBS Bank, has announced that it has purchased a total of 5.319 million shares in the company to date and has ceased price stabilisation action as of today&rsquo s closing. &ldquo As the total number of shares which had been over-allotted in connection with the offering has been fully covered by the purchases made under the price stabilising action, we will not be exercising the over-allotment option granted by Sing Long Investments to the joint bookrunners and underwriters,&rdquo the bank says. JustCo&rsquo s IPO, dated May 22, was priced at 94 cents and saw an overall subscription rate of 3.4 times. Together with $69.8 million in secured cornerstone commitments, the offering raised about $100 million. Some of the cornerstone investors include JP Morgan Asset Management, Amova Asset Management Asia, Fullerton Fund Management and Avanda Investment Management &mdash four fund managers that have been appointed under the Monetary Authority of Singapore&rsquo s Equity Market Development Programme. JustCo intends to use the net proceeds for strategic investments, capital expenditures, general corporate purposes and working capital to support expansion plans in existing and new markets. Shares of JustCo closed 8 cents lower, or 10.5% down at 68.5 cents on June 2. Based on today&rsquo s closing, share price has witnessed a decline of 27.1% from its IPO price of 94 cents. |
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