HRnetGroup (SGX:CHZ)'s 2H22 PATMI of S$32.9m (+11.4% y-o-y) was in line with our and consensus estimates despite the lower-than-expected revenue of S$297.6m (-5.7% y-o-y). The variance was mainly due to the scale back of COVID-related flexible staffing (FS) business in Singapore and a general slowdown in professional recruitment (PR) hiring in Singapore, Greater China and Japan.
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We trim our FY23-24E forecasts by 3-5% on lower placement volumes and introduce FY25E estimates. Maintain BUY on HRnetGroup with a lower target price at S$1.04, still based on 15x FY23E P/E.
Pockets of opportunities despite cautious market
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In 2H22, flexible staffing (FS) segment turnover also declined 4.8% y-o-y to S$250.3m with the scale-back of COVID-related staffing volume in the Singapore healthcare sector. This caused a slight dip in gross profit margin to 14.4% (-1,5ppt y-o-y) in FY22, partly mitigated by higher business volume in other parts of Asia, which resumed normalcy during the year.
Above is an excerpt from a report by Maybank Research. Clients of Maybank Securities may be the first to access the full PDF report @ https://www.maybanktrade.com.sg/.
