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.
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Above is an excerpt from a report by RHB Securities Research. Clients of RHB may be the first to access the full PDF report @ https://www.rhbtradesmart.com/.
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