HRnetGroup - CGS-CIMB Research 2022-08-12: Hiring Still Robust In 1H22

HRnetGroup - Hiring Still Robust In 1H22

  • HRnetGroup (SGX:CHZ) reported a 1H22 net profit of S$35m (+17% h-o-h, -4% y-o-y). Excluding gain/loss from financial assets and one-off trade accrual reversals, core net profit of S$33m (+2% h-o-h, +12% y-o-y) was in line with our expectations and formed 49% of our and 47% of Bloomberg consensus FY22F forecasts respectively.
  • 1H22 revenue growth of 14% y-o-y was driven by both higher permanent recruitment (PR) and flexible staffing (FS) contribution. Positively, average revenue per hire for PR and FS rose 21% and 8% y-o-y, respectively, which we believe were driven by ongoing salary increments across the region.
  • HRnetGroup declared its maiden interim dividend of S$0.0213; we expect an FY22F dividend yield of 5.3%.
  • 1H22 gross profit contribution from North Asia (mostly China, Hong Kong, and Taiwan) rose to S$41m (+4% h-o-h, +24% y-o-y). We felt this was a positive surprise given tight pandemic restrictions in the region. HRnetGroup's management shared that growth was largely driven by the semiconductor sector.
  • We believe ongoing tightness in the labour market should further support upward revision in placement salaries. Labour demand from travel and consumer-related sectors should remain robust since Singapore eased its pandemic restrictions in Apr 22. However, we believe employers could slow the hiring of full-time staff in view of
    1. weakening macroeconomic environment, and
    2. inflationary pressures.
  • We lower our FY23-24F gross profit forecast for HRnetGroup by 0.4-3.8% as we increase the proportion of lower-margin flexible staffing (FS) contribution. We also factor in higher staff expenses. Reiterate ADD recommendation on HRnetGroup with a lower target price of S$1.08.
  • HRnetGroup's net cash remains strong at S$332m (vs. 2H21: S$352m), which accords the group ample firepower for M&A opportunities, in our view.

Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @

Kenneth TAN CGS-CIMB Research | LIIM Siew Khee CGS-CIMB Research | 2022-08-12
SGX Stock Analyst Report ADD MAINTAIN ADD 1.150 SAME 1.150

Previous report by CGS-CIMB:
2022-07-06 HRnetGroup - Labour Shortage A Boon

Target prices by 4 other brokers at HRnetGroup Target Prices.
Listing of broker reports at HRnetGroup Analyst Report.

Relevant links:
HRnetGroup Share Price History,
HRnetGroup Announcements,
HRnetGroup Dividends & Corp Actions,
HRnetGroup News Articles


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