SEEK Limited reports Zhaopin.com results: Will it win big in China?

SEEK Limited (ASX:SEK) has big ambitions and could be one of the best investments on the ASX.

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Online jobs portal SEEK Limited (ASX: SEK) today posted the third-quarter results for its Chinese doppelganger Zhaopin.com.

SEEK is the majority owner of the Chinese website which posted quarterly earnings of RMB 77.5 million on revenue of RMB 317.5 million. That's around $16 million and $66 million respectively on FX-adjusted terms and the revenue and earnings growth is up 24% and 18% over the prior corresponding period.

Despite being an exclusively China-based business Zhaopin was listed on the New York Stock Exchange around this time last year under the trading code ZPIN, with an estimated market value around US$750 million.

It's not unusual for large Chinese companies to list on US exchanges as this promotes investment and credibility in the eyes of international investors. The most recent example being Alibaba.com, China's answer to Amazon.com.

Zhaopin has however traded flat in its first year as a public entity and expectations that it may well eclipse SEEK's market value of US$5.5 billion one day appear fanciful for the moment.

Of course Zhaopin does have plenty of potential and buyers of ASX-listed SEEK shares are taking ownership of one of Australia's most globally focused technology businesses.

SEEK is seeking to replicate the dominance of its local employment website in vast job markets throughout India, SE Asia, South America and Africa. It's also moving successfully into the online professional education services sector, which looks another strong growth sweet spot into the future.

Given the tailwinds it's a tantalising growth prospect and selling for $16.75 it currently trades on around 28x analysts' estimates for financial year (FY) 2015's earnings per share. This looks decent value given earnings growth is forecast to average around 20% this year and FY16.

Smart investors will look much further ahead than the next 6 to 18 months and realise that strong compounded earnings growth rates over a 5 to 10-year timeframe could lead to some market-thumping performance for today's buyers.

In my opinion SEEK looks an excellent growth opportunity alongside other online marketplaces growing internationally like REA Group Limited (ASX: REA) and Carsales.Com Ltd (ASX: CAR).

Of course the way to make the really eye-watering gains is to find the SEEK or Carsales of tomorrow not today! And I'm not kidding when I say one of the two below small-cap superstars may be just that!

Motley Fool contributor Tom Richardson does not own shares in any of the companies mentioned. You can follow Tom on Twitter @tommyr345 We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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