- We continue to like HRnetGroup (SGX:CHZ), as we anticipate economic recovery in Singapore and China. Our economist forecasts Singapore’s 2024 GDP growth to accelerate while maintaining strong GDP growth of 5% for China.
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- Valuations are compelling, with forward P/E at -0.5 standard deviation of its historical mean and a dividend yield of 5%.
4Q23’s unemployment rate remained low.
- Based on the Ministry of Manpower’s (MoM) latest Monthly Unemployment Situation for 4Q23, overall unemployment rates in Dec 2023 remained low at 2% (resident: 2.8%, citizen: 2.9%). The citizen unemployment rate of 2.9% was slightly better than 3Q23’s 3%. The number of retrenchments declined to 3,460 for the quarter from 4,110 in 3Q23.
- Job vacancies to unemployed persons increased in 4Q23 to 1.74 from 1.64 in 3Q23 after consecutive quarters of decline. The recruitment rate inched up from 2.2 in 3Q23 to 2.3 in 4Q23.
Expect better job demand in Singapore and China.
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- Ministry of Manpower, in its report, also indicated that labour demand is expected to strengthen on the back of improving GDP growth. Based on its research findings, 48% of firms surveyed in Dec 2023 had plans to hire over the next quarter, an increase from 42.8% in Sep 2023. In addition, 32.6% of firms intended to raise wages in the next three months, rising from the low of 18% in Sep 2023.
- For China, our economists see signs of continued economic recovery and have forecasted a 5% GDP growth for 2024. This should translate into higher job demand in 2024 as well.
Maintain BUY.
- Read more at SGinvestors.io.
