- We continue to like HRnetGroup (SGX:CHZ), as we anticipate growth on the back of economic recovery in Singapore and China even after trimming our estimates. We see growth driven by an improving economy.
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- \Valuation of HRnetGroup is compelling, with forward P/E at -0.5 standard deviation of its historical mean.
1Q24’s unemployment rate increased.
- According to the Ministry of Manpower’s latest Monthly Unemployment Situation for 1Q24, overall unemployment rates in March, inched up to 2.1% (resident: 3%, citizen: 3.1%). The citizen unemployment rate of 3.1% was higher than 3Q23’s 3%. The number of retrenchments declined to 3,030 for the quarter from a high of 4,110 in 3Q23 since 1Q23.
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- The average monthly recruitment rate, which has averaged at 2.3% in the past four quarters, declined to 2.1% in 4Q23.
Expecting weaker job demand in Singapore.
- The data showed continued expansion of the labour market in 1Q24, albeit at a slower pace. While retrenchments declined, unemployment rate increased. The employment change for the quarter was +4,700, lower than +7,500 for 4Q23 and +33,000 for 1Q23.
- Nonetheless, RHB Economics estimates Singapore’s 2024 GDP growth at 2.5%, accelerating from 2023 – driven by an improving external environment.
- For China, RHB Economics sees signs of continued economic recovery and has forecasted a 5% GDP growth for 2024. This should support job demand in 2024 as well.
Trim FY24F-26F earnings by 3% each.
- Read more at SGinvestors.io.
